THE European Union has signaled it would reject any U.S. push to curb imports of EU cars and auto parts, highlighting the risk of greater transatlantic trade tensions.

EU trade chiefs meeting in Brussels dismissed an idea floated by U.S. President Donald Trump earlier this month of fixing quotas on European automotive exports to the United States. Trump claimed such shipments pose a threat to U.S. national security.

On May 17, Trump put off a decision on auto tariffs for 180 days, but said that “domestic conditions of competition must be improved by reducing imports” and instructed U.S. Trade Representative Robert Lighthizer to address the matter in talks with the EU and Japan. Voluntarily restraining exports is illegal under World Trade Organization rules.

“That is something that we are 100 percent against,” Swedish Trade Minister Ann Linde said earlier this week in the Belgian capital before the gathering with her EU counterparts. France’s junior foreign affairs minister, Jean-Baptiste Lemoyne, echoed the point by saying the 28-nation bloc is determined to respect WTO requirements.

Being played out in the shadow of a U.S.-China trade war that has unnerved investors worldwide, the transatlantic discord over tens of billions of dollars in European auto exports to the American market risks morphing into a new headwind for the global economy.

The issue could scuttle planned EU-U.S. negotiations on eliminating tariffs on industrial goods across the board and end a trade truce struck by both sides in July 2018. That in turn would increase the likelihood of U.S. duties on European cars and an EU tit-for-tat response. (SD-Agencies)