EU says US car import threat 'difficult to understand'

BRUSSELS - The United States (US) investigation into vehicle imports under Section 232 is very hard to understand, European Commission Vice-President Jyrki Katainen said on Thursday.

US President Donald Trump said on Wednesday that he has instructed Secretary of Commerce Wilbur Ross to consider initiating a national security investigation into automobile imports, a protectionist move that's likely to spark widespread opposition from American trading partners.

Following a conversation with Trump on Wednesday, Ross has initiated a so-called Section 232 investigation into the national security implications of automobile imports, according to the US Commerce Department.

"If now US would unilaterally raise car tariffs for instance, it obviously would be against the WTO (rules) and it's very difficult to imagine it to create any sort of threat to the national security. So it's very difficult to understand," Katainen told a news conference.

"But we have now just heard what has been said and there is a long journey to the practice," he added.

Trump tweeted earlier on Wednesday about "big news" for the country's autoworkers."There will be big news coming soon for our great American Autoworkers. After many decades of losing your jobs to other countries, you have waited long enough!" he tweeted.It is the latest move in the president's America First trade agenda.

The US investigation was based on a rarely-used Section 232 of the Trade Expansion Act from 1962, which would allow the US administration to impose tariffs on the grounds of national security.

The US Commerce Department said it will look into imports of automobiles, including sport-utility vehicles, vans and light trucks, and automotive parts.

The Trump administration had used the same domestic law to impose additional tariffs on steel and aluminum imports in March amid mounting dissent from business groups and trading partners around the world.

"We have indicated very clearly to our US friends that we are always ready to discuss on improving trade environment as we have been trying to do for years. But now the the main trade negotiations(TTIP) are off the table, but if we are exempted from the higher tariffs on aluminium and steel and then we can start discussing on trade issues, " Katainen said.

When being asked whether the US announcement further complicate the discussions or not, Katainen said the EU dont't expect this to further complicate the issue. " We just had to find a solution which is fair and which is suitable for the WTO principles and rules-based trade," he said.

The EU leaders has agreed several areas for discussion with the US side including greater market access for cars to the EU, energy, notably liquefied natural gas, and reform of the World Trade Organization etc.,but only after the EU receives a permanent exemption from the metal tariffs, which it believes illicit under WTO rules.

However, the US side seems unsatisfied. "I think they don't think it is enough," EU Trade Commissioner Cecilia Malmstrom told reporters before a meeting of EU ministers to discuss trade on Wednesday.

"The real aim of the US is to limit EU steel exports to the US (and North American) market," Daniel Gros, director of the European think tank Centre for European Policy Studies (CEPS) told Xinhua.

As the temporary exemption deadline of June 1 approaching, "Probably the EU will agree on 'voluntary' export restraints. This is convenient for EU producers (they can increase prices) and for the US (can claim a 'win')," Gros said.