Juncker pledges to boost auto tariffs if Trump reneges on agreement

[August 31, 2018]  BERLIN (Reuters) - The European Union will respond in kind if U.S. President Donald Trump reneges on his pledge not to impose car tariffs, European Commission President Jean-Claude Juncker said as trade tensions between Europe and the United States rose again.

Juncker told German broadcaster ZDF on Friday that the EU would not let anyone determine its trade policies. If Washington decided to imposed tariffs on vehicles after all, he said, "then we will also do that".

Trump rejected on Thursday an EU offer to eliminate tariffs on cars and said the EU's trade policies are "almost as bad as China", Bloomberg News reported.

Juncker said he had negotiated a "ceasefire agreement" on trade with Trump in July and while such deals were often jeopardized, they were generally respected.

Chancellor Angela Merkel is due to meet Juncker on Tuesday, German government spokeswoman Ulrike Demmer said on Friday. She declined to comment on Trump's latest remarks but said Germany fundamentally sought to lower trade barriers and promote free trade.

The trade issue is also likely to be addressed when Merkel meets French President Emmanuel Macron in France later on Friday.

The EU remains at odds with the United States over the U.S. blocking of the appointment of judges at the World Trade Organization, over tariffs set for reasons of national security, and over Washington's tough stance toward China.

Trump agreed in July to hold back on threatened 25-percent car tariffs while the United States and Europe talked about cutting other trade barriers, but U.S. officials have grown frustrated about the slow pace of progress.

Speaking to the trade committee of the European Parliament on Thursday, European Trade Commissioner Cecilia Malmstrom said the EU had "profound disagreements" with the United States.

Malmstrom said a working group that she and U.S. Trade Representative Robert Lighthizer will oversee on the issue was not engaged in formal negotiations.

She added that the EU would be willing to reduce its car tariffs to zero if the United States did the same, going beyond the provisional agreement struck in July which referred only to "non-auto industrial goods".

In the Bloomberg interview, Trump said of the EU proposal to scrap auto tariffs: "It's not good enough."

(Reporting by Andrea Shalal with additional reporting by Marine Pennetier in Paris; Editing by Mark Heinrich)

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