November 21, 2019 / 4:17 PM / 15 days ago

Europe voices guarded optimism it has dodged U.S. car tariffs

BRUSSELS (Reuters) - EU trade chief Cecilia Malmstrom and ministers expressed cautious optimism on Thursday that the threat of U.S. tariffs on imported European cars had passed.

FILE PHOTO: Cars are seen at the PSA Peugeot Citroen plant in Poissy, near Paris, October 31, 2019. REUTERS/Charles Platiau/File Photo

U.S. President Donald Trump was expected to decide by Nov. 14 whether to impose damaging tariffs on EU cars on the grounds of national security, but the deadline simply passed without event.

“We haven’t received a formal announcement that they will not take place,” Malmstrom said after a meeting of EU trade ministers in Brussels.

“That’s why I’m still a little bit cautious, but... the deadline has passed and there are severe legal limitations for the president to take further action,” she continued.

Reuters reported on Tuesday that the clock had actually run out on Trump’s “Section 232” tariffs on foreign-made cars and auto parts.

Malmstrom said she interpreted the absence of car tariffs as meaning Trump was respecting an agreement he struck a year ago with European Commission head Jean-Claude Juncker not to impose them while the two sides sought to boost economic ties.

She also said there was very little public or business appetite for them in the United States.

“So on this I’m quite optimistic,” she said.

Dutch trade minister Sigrid Kaag said fellow ministers at Thursday’s meeting were positive but cautious.

“There’s a feeling of relief, but that doesn’t mean you’ve got there,” she said, adding they had all agreed that talks toward trade accords with Washington must continue.

The two sides have made progress in talks toward a deal on conformity assessment, which could make it easier for companies to show their products meet EU or U.S market standards.

The European Parliament is expected next week to approve a deal to allow more U.S. beef imports into the bloc.

The ministers also discussed problems at the World Trade Organization, where U.S. blocking of appointments is set to cripple its ability to resolve disputes.

Malmstrom said the EU would continue to work with the United States to find a solution, including reforms of the WTO’s Appellate Body that rules on disputes.

“The WTO is in serious need of reform. I don’t think it is about to collapse, but if nothing happens in the coming years it will be more and more weakened and it will become irrelevant.”

Reporting by Philip Blenkinsop; Editing by Alexandra Hudson

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