Global Daily: Car Wars: The EU (probably) Strikes Back

The Trump administration’s decision to slap a 25% tariff on imported cars and parts is yet another move in America’s ongoing trade battles. Following the global steel and aluminum tariffs, this latest escalation puts pressure on the EU to respond. As we noted yesterday, we believe the European Union prefers to make a deal and prevent a full-blown trade war. However, we argue that Brussels’ decision-making procedures are designed in such a way that escalation is ‘technically’ the path of least resistance. Therefore, absent an agreement, or a clear prospect thereof, European leaders will most likely strike back to any tariffs imposed by the US, even if not fully and with some delay.