The European Union is preparing to offer reduced car import tariffs to the United States as part of negotiations aimed at preventing a potential trade war with Donald Trump.
The bloc is willing to lower its current 10 per cent import tax on American vehicles closer to the US rate of 2.5 per cent, according to Bernd Lange, head of the European Parliament’s trade committee.
The move comes as Brussels seeks ways to reduce its trade surplus with the US, which President Trump has repeatedly criticised.
As part of the proposed deal, the EU would also commit to purchasing more liquefied natural gas and military equipment from the United States.
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The EU could slash tariffs on American cars to appease Trump and the US
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“We can try to have a deal before escalating costs and tariffs,” said Lange, who is familiar with internal EU discussions on de-escalating tensions with the White House.
The strategy mirrors previous EU efforts during Trump’s first term when Brussels successfully limited trade disputes by lowering tariffs on lobsters and increasing purchases of LNG and soybeans.
The Financial Times reported that the EU car industry has expressed support for the tariff reduction plan, according to Brussels officials.
Trump has complained that Europeans “don’t buy our cars, they don’t take our farm products, they take almost nothing and we take everything from them”.
In 2022, the EU exported 738,436 vehicles to the US, valued at £37.4billion. In contrast, it imported just 271,476 vehicles from the US, worth £8.7billion.
Leading industry figures have backed the initiative, with BMW chief executive Oliver Zipse calling for lower tariffs and Mercedes boss Ola Källenius advocating for a “grand bargain” with Trump.
Any reduction in car tariffs would apply to all World Trade Organization members, not just the United States, under WTO rules.
Lange added: “We have bound tariffs for cars at the WTO at 10 per cent, but let’s say, to show the world we have fair relations, it might be possible to reduce them.”
However, EU officials remain confident that Chinese imports would not surge following such reductions.
This confidence stems from existing EU tariffs of up to 35 per cent on Chinese electric vehicles, imposed due to what Brussels considers unfair subsidies from Beijing.
Should negotiations fail, the EU is prepared to deploy its anti-coercion instrument, a new measure that could target US tech and financial companies.
“Sometimes it’s important to have a gun on the table,” said Lange, discussing the tool created after Trump’s first term.
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The EU exports more vehicles to the United States than it imports
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It remains unclear whether the UK Government will consider introducing tariffs on any nation to protect the automotive industry.
In 2023, former Transport Secretary Mark Harper suggested that the UK would launch action if prompted, specifically in relation to the growing Chinese influence in motoring.
A Government spokesperson previously told GB News: “We are always vigilant to international developments and are very clear that any decision over the implementation of tariffs has to be the right one for our domestic automotive industry.”