November 7, 2019 / 7:51 PM / 5 days ago

Juncker says Trump won't impose tariffs on European cars - Sueddeutsche

BERLIN/WASHINGTON (Reuters) - Outgoing European Commission President Jean-Claude Juncker does not believe U.S. President Donald Trump will impose tariffs on imported European cars next week, he told Germany’s Sueddeutsche Zeitung.

FILE PHOTO: EU Commission President Jean-Claude Juncker attends a meeting of the College of EU Commissioners in Brussels, Belgium November 6, 2019. REUTERS/Yves Herman

“Trump is going to make some criticism, but there won’t be any auto tariffs,” Juncker told the Sueddeutsche in pre-released extracts of an interview to run in its Friday edition. “He won’t do it. ... You are speaking to a fully informed man.”

The U.S. Commerce Department declined to comment.

Juncker’s comments were the most definitive sign to date that Washington will hold off on imposing tariffs on imported vehicles that would have a huge ripple effect on European carmakers and many suppliers in the United States.

The United States must decide by Nov. 14 whether to impose threatened U.S. national security tariffs of as much as 25% on vehicles and parts under a law known as Section 232. The tariffs have already been delayed once by six months, and trade experts say that could happen again.

Matt Blunt, who heads a trade group representing General Motors Co (GM.N), Ford Motor Co (F.N) and Fiat Chrysler Automobiles NV (FCAU.N), said on Thursday the group remains “opposed to the imposition of Section 232 tariffs on automobiles or parts. It would be harmful to the economy and the auto industry.”

The United States has already signed trade deals with Japan and South Korea that appeared likely to stave off auto tariffs, but its talks with the EU have been moving forward more slowly.

Trump last month said Washington continued to talk with the EU about trade, but aimed to avoid imposing broader tariffs for now.

U.S. Treasury Secretary Steven Mnuchin also lauded increased investment by European carmakers in the United States. Those remarks have given EU diplomats hope for another reprieve.

Senate Finance Committee Chairman Charles Grassley, a critic of the Trump administration’s declaration of auto imports as a national security threat, told reporters on Wednesday that he expected the threatened car tariffs to be delayed again.

He said the administration had not responded to his request to see the full report on the issue. “I think they’re embarrassed to make public what the report actually says,” he said.

One European diplomat said discussions were heading in the right direction, but cited concern that Trump could abruptly change his mind at the last minute.

Germany’s BMW AG (BMWG.DE), the biggest U.S. automotive exporter by value for the past five years, last month said it had warned U.S. officials that intensifying a global trade war could threaten jobs at its plant in Spartanburg, South Carolina, which exports about 70% of its production.

Both BMW and Daimler AG (DAIGn.DE) have invested to expand the production capacity of plants in the United States where they build mainly larger sports utility vehicles (SUVs) to keep up with rising demand and because it makes good economic sense.

Volkswagen AG (VOWG_p.DE) in January pledged to invest $800 million (£624.17 million) and add 1,000 jobs to build electric vehicles in Chattanooga, Tennessee.

Writing by Paul Carrel; additional reporting by Andrea Shalal and David Shepardson in Washington; Editing by Chizu Nomiyama and Jonathan Oatis

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