Wilbur Ross, the US commerce secretary, has floated new talks with the EU as an alternative to imposing tariffs on automotive imports next month, raising the possibility of a further reprieve for Brussels in the transatlantic stand-off over trade in the car industry. 

In an interview with Trade Secrets, the Financial Times newsletter, Mr Ross said President Donald Trump could choose “some other form of negotiation” as a possible path in the face of the administration’s controversial conclusion that automotive imports are a threat to US national security. 

Washington’s threat to impose levies on cars and car parts has emerged as a huge source of strain in relations with the EU, clouded the outlook for the global economy, and faced resistance among Mr Trump’s closest Republican allies in Congress.

Although the threat of car tariffs applies globally, it is most relevant to the EU since Canada, Mexico, South Korea and Japan have each struck deals with the Trump administration to protect them from the levies.

The Trump administration has hesitated to pull the trigger on the tariffs so far, amid concern, even from some high-ranking officials within the administration, of the economic impact and political backlash it could cause in the US. 

In May, Mr Trump offered carmakers a six-month reprieve from the levies, setting up a new deadline for a decision in mid-November. A strict interpretation of US trade law would present the president with a binary choice between ploughing ahead with tariffs or dropping the threat entirely, but Mr Ross suggested a new deferral might be possible.

“One [option] would be to say, ‘I’m just not going to do anything’, the second would be to impose tariffs on some or all [countries] . . . the third might be some other form of negotiation,” he said.

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Mr Trump “has quite a lot of alternatives as to what he can decide to do, and I don’t think we should prejudge what the conclusion will be”, Mr Ross added.

The mere threat of levies had already had the desired effect of spurring new investment in the US car sector, he said. “We are very encouraged by the willingness of many [global carmakers] to produce more of their product in the US. That’s really what the objective had been, anyway.” 

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Transatlantic trade tensions already increased this month after Washington moved to slap tariffs on $7.5bn of EU goods — including French wine, Italian cheese, Scotch whisky, and Spanish olive oil — in response to a WTO ruling that Europe’s Airbus had received illegal subsidies. Bruno Le Maire, France’s finance minister, described the tariffs as “very aggressive”, but Mr Ross dismissed the criticism. “These [tariffs] are not something we did just unilaterally, this is with the full support of the WTO. That’s a fact that people like the French choose to overlook,” Mr Ross said.

EU leaders have called for negotiations to solve the dispute, and Mr Ross said a possible settlement could come after the WTO authorises EU tariffs on American goods as punishment for US support of Boeing in a case likely to be concluded next year. Mr Ross said the Boeing tariffs could simply be subtracted from the Airbus tariffs. 

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“There would be a certain degree of logic to applying a net tariff, I’m not saying that’s what we would do but there have been people advancing that theory,” Mr Ross said. “I have no idea if it’s agreeable to the Europeans or not,” he added. 

Mr Ross, an 81-year-old New Jersey native who made his fortune as an investor in distressed assets in the steel, coal and textile sectors, was optimistic about the prospects that Mr Trump could finalise a limited truce with China on trade at the Apec summit in Chile next month.

“You never know with paperwork, you can always run into a glitch at the last minute. But I’d say [the chances] are better — far better than 50/50 that it’s signable on or about the time of the Chile conference,” Mr Ross said. China was “following through in good faith on the promises that they made” earlier this month to press ahead with big purchases of US farm products, he said.

Mr Ross said a settlement on the US placement of Huawei, the Chinese telecommunications equipment maker, on an export blacklist, was not part of the negotiations. The Trump administration’s general licence for US companies to sell to Huawei expires in the middle of next month, but Mr Ross said this was not a hard deadline.

“The deadlines are within our control, we can shorten them, we can lengthen them, we can do whatever — at this point they are being treated separately and independently from the trade talks,” he said. 

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Mr Ross spoke to the FT immediately after a cabinet meeting on Monday as Mr Trump’s presidency continued to be afflicted by the impeachment inquiry run by Democrats in the House of Representatives who claim he used his position to press foreign leaders, most blatantly in Ukraine, to investigate domestic political rivals.

Mr Ross said the probe was based on a “hallucination” and indicated he did not participate in alleged efforts by administration officials to persuade Kiev to probe Hunter Biden, the son of former vice-president Joe Biden — a pressure campaign which is at the heart of the impeachment case. “I’ve had some discussions with the Ukrainians on other topics. I’ve never heard any of them imply a quid pro quo and I surely haven’t heard it from the president,” Mr Ross said.



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