EU threatens duties on 35bn euros in US goods

BRUSSELS: The EU is ready to hit the United States with extra tariffs on goods worth 35 billion euros if Washington slaps duties on its cars, its trade chief said Tuesday.

The warning by EU Trade Commissioner Cecilia Malmstrom came as she said a plan by Europe and United States to reach a limited trade deal was at a standstill.

Malmstrom's stark statement to newly elected MEPs in Brussels was a reminder that transatlantic tensions remained high despite Washington's trade war with China dominating attention.

"We will not accept any managed trade, quotas or voluntary export restraints and, if there were to be tariffs, we would have a rebalancing list," Malmstrom told a committee meeting in European Parliament.

"It is already basically prepared worth 35 billion euros ($39 billion). I hope we don't have to use that one," she said.

US President Donald Trump is still considering imposing punishing duties on automobile imports on national security grounds -- a justification that Malmstrom said was wildly unfounded.

"We welcome the decision by the US not to impose yet duties on cars and car parts," she said.

"But of course the very notion that European cars can be a national security threat to the US is of course absurd," she added.

The comments were made almost a year to the day after European Commission chief Jean-Claude Juncker and Trump thrashed out a trade truce in the White House.

This followed a bitter round of tit-for-tat tariffs, that remain in place, after the US sparked the row by imposing tariffs on steel and aluminium from Europe.

Negotiating a limited trade deal was the heart of the truce, but Malmstrom said the US was unwilling to move forward with talks.

"The United States are not ready to start them if agriculture is not included which is a red line for us," she said.

"So for the moment nothing happens here," she said.