The European Union’s top trade official has announced the bloc will consider including cars among US industrial goods that could be imported duty free.
“We are willing to bring down even our car tariffs to zero, all tariffs to zero, if the U.S. does the same,” EU Trade Commissioner Cecilia Malmström told a European Parliament committee meeting in Brussels on August 30.
Removing tariffs “would be good for us economically and good for them – mutually beneficial,” she said.
As reported by Bloomberg, even though Malmström’s comments go beyond a joint EU-US statement on July 25 that said the two sides would work toward eliminating tariffs on “non-auto industrial goods,” the bloc already had expressed a willingness to cut levies on cars and car parts among all major automobile-exporting countries, according to an official.
“While nothing is certain, this rhetoric sounds a little more like ‘free-trade’ than it does ‘trade-war,”’ Northern Trust Capital Markets said in a research note. “Is the market positioned for that?”
In related news, CNBC online noted that auto stocks in Europe spiked on August 30 after Malmström’s announcement.
This is good news since auto stocks in Europe have struggled this year. Investors feared US President Donald Trump would follow through on a June tweet that stipulated that if the EU does not remove duties on US cars, then the US will have no choice but to impose a 20% tariff of its own.
Following that threat, shares of BMW, Volkswagen, Fiat Chrysler and Mercedes-maker Daimler all moved lower. Ford and General Motors shares also slipped following the news.