The European Union has decided to lower tariffs on American car imports as a strategic move to prevent a trade war with the United States

The European Union is rushing to lower taxes on American cars in an effort to prevent a trade war with Donald Trump.

Brussels is planning to reduce the 10% tariff on U.S. car imports to bring it closer to the 2.5% tariff that the U.S. charges on European cars, according to Bernd Lange, a senior member of the European Parliament’s trade committee.

“We can try to reach a deal before costs and tariffs escalate,” Lange told the Financial Times. “We have a 10% bound tariff for cars at the WTO, but to show the world we have fair relations, it might be possible to reduce that.”

This announcement comes as President Trump pledged to introduce new tariffs next week to address what he considers an unfair trade imbalance between the U.S. and its global trading partners.

“I’ll be announcing something next week on reciprocal trade,” Trump told reporters. “We want to be treated fairly, no more and no less.” He hinted that tariffs on car imports were a possibility, calling it a “very big deal” that is “always on the table.”

The EU exported €37.4 billion worth of cars to the U.S. in 2022, while only importing €8.7 billion in American-made cars.

On Friday, Trump suggested he might not impose blanket tariffs but instead match other countries’ tariffs on U.S. goods.

“Where a country charges us a lot, we’ll do the same—it’s very reciprocal,” Trump said during a White House press conference. “I think that’s the fairest way to handle it.” He promised more details early next week, either Monday or Tuesday.

This marks a shift from Trump’s earlier threats to impose blanket tariffs on all imports from China and the EU. Previously, Trump warned he might apply a 20% tariff on all EU goods, citing the bloc’s €156 billion trade surplus with the U.S.

The EU, which has prepared a list of retaliatory tariffs on iconic American products like Harley-Davidson motorcycles and Kentucky bourbon, hopes to avoid a trade confrontation. In the past, Trump postponed tariffs on Canada and Mexico after tense negotiations.

Lange warned that if a deal can’t be reached, the EU could hit back using the “anti-coercion instrument,” a trade defense measure created after Trump’s first term to counter countries using trade as leverage to influence domestic policies. The tool could target U.S. tech and financial giants, applying duties to streaming services or suspending intellectual property rights.

“Sometimes it’s important to have a gun on the table,” Lange said. “We are more powerful than Canada or Mexico. We can defend our economic interests.”

Trump has previously criticized the EU’s trade policies as “an atrocity” and hinted at imposing tariffs “soon.” He suggested that Britain would be easier to deal with and that a trade agreement could be worked out.

In addition to cutting car tariffs, European Commission President Ursula von der Leyen has floated the idea of increasing EU purchases of American liquefied natural gas (LNG) to reduce the trade surplus and decrease reliance on Russian energy.

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