Caterpillar Inc trucks, Xerox Corp machines and Samsonite International SA luggage are among US goods that would face retaliatory European Union tariffs should President Donald Trump follow through on a threat to impose automotive duties against the bloc, according to a senior EU official.
The person commented on Friday on the condition of anonymity because the tit-for-tat list drawn up by the European Commission, the EU’s executive arm in Brussels, is still a confidential draft.
The commission said last month the EU would hit 20 billion euros ($22.7 billion) of US products should Trump impose duties on European cars and auto parts on the same national-security grounds that he invoked last year to tax foreign steel and aluminium. The commission has declined to disclose any US products that would be subject to EU duties prompted by any US automotive levies.
“Should there be tariffs on car and car parts, which we don’t want, we have started internally to prepare a list of rebalancing measures,” EU Trade Commissioner Cecilia Malmstrom told reporters on Friday in Bucharest, after a meeting of the bloc’s commerce ministers. “There is full support to do this.”
Caterpillar, which announced earnings last month, had its biggest profit miss in a decade on worries over trade tensions. The Deerfield, Illinois-based company also issued a 2019 profit forecast range which, at the low end, was below the average of analysts’ expectations.
Shares of Caterpillar fell as much as 1.1 per cent in early trading before US markets opened on Friday, while Xerox dipped as much as 3.9 per cent. S&P 500 futures pared their gains.
If the US raises tariffs on vehicles and auto parts, it will make the levies imposed on steel and aluminium last year “look like a picnic,” Mike Jackson, the CEO of car-dealership group AutoNation, said in an interview.
“It’s almost so unthinkably, draconianly disruptive to everything he’s trying to do with the economy that, at the end of the day, I don’t believe it will happen,” Jackson said, referring to Trump, adding that higher car duties would be “the nuclear tariff option.”