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Trump and Juncker.
- EU reportedly ready to hold talks with major car manufacturers about a coordinated effort to cut pre-existing tariffs.
- US officials aren't believed to be keen on the idea, saying it would not "make a lot of sense for us."
- Trump has threatened to place tariffs on European automobiles, but has not yet followed through.
LONDON - The European Union is reportedly ready to hold talks with major car manufacturers about a coordinated effort to cut pre-existing tariffs, as a means of defusing President Donald Trump's trade war before it escalates further.
According to a report in the Financial Times, senior EU officials are drawing up plans to discuss a deal between major car exporters including Japan, South Korea and the US, to cut tariffs on their movement globally. This would be an attempt to address Trump's belief that the US is unfairly punished in the global car trade.
It would also reduce "export costs for other participating countries' auto sectors," the FT reports.
The European Commission has not confirmed the plans, saying that President Jean-Claude Juncker "has not yet decided what to discuss at the meeting with President Trump," the FT said. The meeting will take place in the coming weeks.
Reports of the EU's possible new strategy come just a couple of days after the same publication reported that a letter sent by the European Commission to the US Department of Commerce threatened to hit $300 billion of US goods with tariffs if Trump follows through on his threats to place big taxes on European vehicles being imported in the US.
The EU's letter reportedly said the bloc had not yet decided on countermeasures to any new auto tariffs but said it was "likely" to apply them to "a significant volume of trade" in the event Trump imposed such tariffs.
Trump has sparked a global trade conflict by placing or threatening punitive tariffs on hundreds of billions of dollars' worth of goods from China, Mexico, Canada, and the European Union.
Trump recently turned his attention to the automotive sector, focusing on European manufacturers. "Based on the Tariffs and Trade Barriers long placed on the US and it great companies and workers by the European Union, if these Tariffs and Barriers are not soon broken down and removed, we will be placing a 20% Tariff on all of their cars coming into the US," Trump tweeted back in June. "Build them here!"
While he has threatened auto tariffs, Trump has not yet followed through on them. If those tariffs are launched, it would likely signal the start of a full blown trade war, moving well beyond its current scale.