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Commerce Secretary: No auto tariffs on EU during trade negotiations

The United States will hold off on imposing tariffs on European automobile imports while the U.S. and EU continue trade negotiations, Commerce Secretary Wilbur Ross told reporters July 26, according to White House pool reports.

President Donald Trump and European Commission President Jean-Claude Juncker announced July 25 that they would immediately begin trade talks to quell rising trade tensions between the trading partners that account for about half of global GDP. Fears that the U.S. could place a 25% tariff on European car imports had strained trade relations and contributed to the two leaders' meeting at the White House on July 25.

Because Trump and Juncker did not take questions from reporters following a joint press statement July 25, the status of the looming auto tariffs had remained unclear.

"In terms of auto tariffs, we've been directed by the president to continue the investigation, get our material together but not actually implement anything pending the outcome of the negotiation," Commerce Secretary Ross told reporters aboard Air Force One. "What we've agreed is not to impose automotive tariffs while the negotiations are underway. There's really no change to that situation."

The Commerce Secretary said it would be hard to judge how long talks with the EU may take.

"Normally trade discussions take months or a year," he said. "We're going to try to do them much faster."

Ross said that his department planned to submit a report on auto tariffs at some point in August following the close of the Commerce Department's Section 232 investigation into automobile and automobile parts imports, launched in May on the grounds of national security. Should it be deemed that the U.S. has a reliance on imports of autos and auto parts, the Trump administration could impose a 25% tariff on all auto imports, including those from Europe.

European Commissioner for Trade Cecilia Malmstrom said ahead of the meeting that the EU was ready to impose retaliatory tariffs on $20 billion of U.S. exports including agricultural products and high-tech products should the U.S. push ahead with the auto tariffs.

Ross also told reporters that the Trump administration's 25% tariff on steel imports and 10% tariff on aluminum imports, which the EU was not granted an exemption from, will stay in place on the 28-country bloc during trade talks.

He claimed that the metals tariffs led to the agreement announced by Trump and Juncker on July 25, adding that the steel and aluminum tariffs were a "real vindication" of Trump's trade policy, according to the pool reports.

"If we hadn't had steel and aluminum tariffs, we never would have gotten to the point we are now," Ross said.

However, after the EU was not granted an exemption from the metal tariffs, which went into effect June 1, the bloc imposed a 25% tariff on £2.8 billion of American goods, including Harley-Davidson Inc. motorcycles, blue jeans, and bourbon whiskey.

As part of the agreement reached July 25, the EU will import more American soybeans and liquefied natural gas, and reduce trade barriers for areas such as medical devices, chemicals and pharmaceuticals, Trump said.