MNI POLICY: Former USTR Zoellick Sees EU Car Tariffs Next Year

--Trump Will Impose Tariffs If Re-Elected, Ex-World Bank Chief Says

By Brooke Migdon

     WASHINGTON (MNI) - European automakers should brace themselves for U.S.

tariffs next year if President Donald Trump wins a second term, former Trade

Representative Robert Zoellick said.

     "The auto sector is just sitting there," he said Tuesday while speaking at

the Washington International Trade Association's annual conference. Germany is a

likely prime target in a move that would "smack" that economy, he said. 

     Treasury Secretary Steven Mnuchin renewed the EU auto tariff threat last

month at the World Economic Forum in Davos while speaking on a panel with UK

Treasury chief Sajid Javid. The U.S. also reportedly threatened to tax European

cars if the EU did not accuse Iran of violating the 2015 Iran Nuclear Deal, the

Washington Post reported last month.

     Carmakers have rallied against the tariffs, claiming they would come at the

cost of U.S. manufacturing jobs -- and in key battleground states for Trump as

he begins campaigning for re-election. Other nations have also questioned the

use of a national security clause to put sanctions on civilian cars and trucks,

a strategy Congress has shown little interest in opposing.

     "The market would react very negatively so I don't expect to see it this

year because it is an election year," Zoellick said. But Trump needs leverage if

he wants to reach a trade deal with the EU by the end of the year, so automakers

should "better darn expect" tariffs next year if Trump is re-elected.

--MNI Washington Bureau; +1 202 371 2121; email: brooke.migdon@marketnews.com

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