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POLITICO

This story is published in a content partnership with POLITICO. It was originally reported by Adam Behsudi and Doug Palmer on politico.com on November 21, 2019.
Trump administration officials are considering whether to start a new trade investigation against the European Union as the window closes for hitting Brussels with vehicle tariffs, according to multiple people briefed on the issue.
Such a move would mean that European car imports would not be subject to duties out of national security concerns, but the trading bloc would be subject to a much broader inquiry, the people said.
“What it would do is it would create a situation that for another year would give the president leverage over the EU,” said a former administration official.




US President Donald Trump was supposed to make a decision by November 14 on whether to take action against imports of cars and parts from the EU.
But with the deadline passed, questions are now being raised over whether he can continue using Section 232 of the Trade Expansion Act of 1962 to take any future tariff action. The previously little-used provision allows the president to impose trade restrictions if imports are considered a threat to national security.
An investigation under Section 301 of the Trade Act of 1974 would be potentially more sweeping and would subject numerous European industries, subsidies and other programmes to scrutiny. The move would also effectively terminate the national security investigation.
Section 301, which also has been little used by previous administrations, allows the president to impose trade restrictions if an investigation finds that a country is engaged in a practice that is unjustifiable and burdens or restricts US commerce.
Bromance over? Trump slams ‘foolish’ Macron over tech tax
Trump used the Section 301 provision to justify wave after wave of tariffs on China after an investigation by the US Trade Representative’s Office found that Beijing's policies on technology transfer and intellectual property “burden or restrict US commerce”.
Those briefed on the latest matter said it was not clear which EU trade policies that the administration would target in any inquiry, and whether cars are still the main target of Trump's potential actions.
Trump has consistently complained that the EU imposes a 10 per cent tariff on vehicles while the US only has a 2.5 per cent import duty on passenger cars. He has also argued that the current transatlantic trade relationship is unfair because the United States has a US$151 billion trade deficit in goods with the EU.
“Many countries charge us extraordinarily high tariffs or create impossible trade barriers. Impossible,” Trump said last week in an economic policy speech in New York. “And I’ll be honest: European Union – very, very difficult. The barriers they have up are terrible. Terrible. In many ways, worse than China.”

The US Trade Representative's Office, which would be responsible for launching a new Section 301 investigation, did not respond to an inquiry on the potential action. The Commerce Department, which is in charge of Section 232 investigations, referred questions to USTR and the White House.
Already, Trump has faced enormous pressure for trying to use national security justification to pursue tariffs on allies.
Trump invoked such a provision to justify duties on steel and aluminium imports that began last year. The law was invoked again to investigate the national security risk posed by car imports.
Canada, Mexico, South Korea and Japan were able to escape steel and aluminium duties after negotiating trade deals with the US, but EU car imports have remained in the administration’s crosshairs.
Trump wants US to start manipulating dollar to ‘match’ China and Europe
Section 232 gives the president a 180-day time limit to negotiate agreements to address any national security concerns, if he decides to punt on imposing tariffs, “but it doesn’t require an announcement”, said Gary Hufbauer, a senior fellow with the Peterson Institute for International Economics.
US Trade Representative Robert Lighthizer submitted a report to the president last week providing Trump an update on the European negotiations, but a decision was never made.
A recent court ruling has raised questions about whether Trump's failure to make a decision by the deadline nullifies his use of the law to threaten car tariffs.
The US Court of International Trade ruled last week that Trump violated a separate Section 232 deadline when he tried to double steel duties on Turkey in August 2018 after a 90-day deadline.

Trump has since reduced the steel tariffs on Turkey back to their original level of 25 per cent, but the ruling provides the first instance of a court pushing back on the president’s use of the law.
“The president’s expansive view of his power under Section 232 is mistaken, and at odds with the language of the statute, its legislative history, and its purpose,” the court wrote in a November 15 opinion.
Critics of Trump’s use of the statute have held up the ruling as a clear indication that the window for tariffs has closed.
“As a recent US trade court opinion stated, the president’s authority to impose ‘national security’ tariffs or other import restrictions under Section 232 is not indefinite,” Senator Pat Toomey said. “With the 180-day deadline having passed, the window for new ‘national security’ taxes on imported automobiles has closed.”
US official criticises countries ‘opening their arms’ to Chinese 5G
Legal experts say the ruling also puts firmer ground under future challenges to any action Trump might take now on auto tariffs against the EU.
“I strongly believe if the president were to impose tariffs now, there would unequivocally be legal challenges,” said Jennifer Hillman, a Georgetown University law professor who previously served as a WTO judge and general counsel at USTR.
“They could be at substantial risk of losing that one,” she added.
https://www.politico.com/news/2019/11/21/trump-trade-investigation-european-union-072517


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US-ally trade wars

Donald Trump weighs new trade investigation to justify tariffs on EU

US and European Union flags fly at the European Commission headquarters in Brussels in 2017. Photo: Reuters

President Donald Trump listens to U.S. Trade Representative Robert Lighthizer, before signing a presidential memorandum targeting China's economic aggression at the White House on March 22, 2018 in Washington, D.C. MUST CREDIT: Washington Post photo by Jabin Botsford

epa06831767 (FILE) - Cars of German car maker Mercedes Benz are parked at the automotive terminal at the port of Bremerhaven, northern Germany, 23 July 2017 (issued 22 June 2018). US President Donald J. Trump sent out a tweet threatening a 20 percent tariff on cars imported from Europe. German auto stocks fell after Trump threatens tariffs on EU car imports. EPA-EFE/FOCKE STRANGMANN

Trump misses his own deadline to impose ‘Section 232’ auto tariffs on foreign-made cars and parts

Cargo cranes are used to take containers off of a Yang Ming Marine Transport Corporation boat at the Port of Tacoma. Photo: AP Photo

epa07980273 An aerial photo made with a drone shows the Knauz Mercedes, Knauz BMW and the Knauz Hyundai dealership complex in Lake Bluff, Illinois, USA, 07 November 2019. According to reports, the Trump Administration faces a 13 November deadline to decide if 25 percent tariffs will be placed on Asian and European imports of automobiles. If implemented, it is estimated that average increases will amount to more than 4,000 US dollars on autos and affect all automakers due to the reliance on global supply chains. EPA-EFE/TANNEN MAURY

US to hit Europe with tariffs on up to US$7.5 billion in goods after landmark World Trade Organisation ruling

US and European Union flags at the European Commission headquarters in Brussels in February 2017. Photo: Reuters

FILE PHOTO: U.S. President Donald Trump speaks during a ceremonial swearing-in for Labor Secretary Eugene Scalia at the White House in Washington, U.S., September 30, 2019. REUTERS/Leah Millis/File Photo

German Chancellor Angela Merkel (R) and World Trade Organisation (WTO) director-general Roberto Azevedo address a press conference after talks at the Chancellery in Berlin on October 1, 2019. (Photo by John MACDOUGALL / AFP)

European Commissioner for Trade Cecilia Malmstrom speaks during a media conference after an informal lunch of EU trade ministers at the Europa building in Brussels, Tuesday, Oct. 1, 2019. The World Trade Organization ruled in May that Europe illegally subsidized Airbus, hurting U.S. competitor Boeing. The WTO is set shortly to allow President Donald Trump to slap tariffs worth billions of euros on European products, including wine, cheese and olives, in response. (AP Photo/Virginia Mayo)

France’s Emmanuel Macron laments Nato’s ‘brain death’ as Donald Trump’s US ‘turns its back on us’

French President Emmanuel Macron speaks at a press conference during the Nato summit in Brussels in July 2018. Photo: Reuters

07 November 2019, Berlin: German Chancellor Angela Merkel (R) and Nato Secretary General Jens Stoltenberg hold a joint press conference following their meeting in the Federal Chancellery. Photo: Bernd von Jutrczenka/dpa

President Donald Trump listens to a question as he speaks in the Diplomatic Room of the White House in Washington, Sunday, Oct. 27, 2019. (AP Photo/Andrew Harnik)

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US president missed his own deadline earlier this month to take action against European cars on national security grounds
Trump could turn instead to wider probe under same trade provision used to justify wave after wave of tariffs on China



After missing deadline to tax European cars, US president could turn instead to trade provision used to justify wave after wave of duties on Chinese imports.


Donald Trump

European Union

Trade

United States

Politico | Donald Trump weighs new trade investigation to justify tariffs on EU

US president missed his own deadline earlier this month to take action against European cars on national security grounds Trump could turn instead to wider probe under same trade provision used to justify wave after wave of tariffs on China

US president missed his own deadline earlier this month to take action against European cars on national security grounds

Trump could turn instead to wider probe under same trade provision used to justify wave after wave of tariffs on China