On July 30, 2018, Automotive News quoted Ashley Craig regarding the discussion between the U.S. and European Union (EU) to reduce tariffs on a variety of products. According to the article, President Trump has repeatedly criticized the EU over its high import tariffs and imbalanced auto trade, yet the auto sector was omitted from the agreement discussion.
Mr. Craig said, "They haven't started to touch autos because they know it's the third rail."
As a result of the agreement between European Commission President Jean Claude-Juncker and President Trump, both sides will refrain from imposing tariffs while negotiations are in progress. The truce was welcomed by German automakers with caution, because it sidelines for now Trump’s threat of 20 percent tariffs on European vehicles and will give the EU an exemption from possible 25 percent tariffs if an ongoing U.S. investigation — under Section 232 of the Trade Expansion Act of 1962 — determines that auto imports pose enough of a national security threat to warrant protective tariffs.
Craig noted that the EU bought itself some time with last week's cease-fire in the escalating trade war, which started with the U.S. imposing steel and aluminum tariffs on national-security grounds. EU officials were not inclined to start offering compromises on auto tariffs until they see the outcome of the Section 232 investigation.
Craig added, "They're hopeful the overwhelming opposition to the 232 investigation will dissuade the administration from moving forward."