Centre for European Reform

Aslak Berg, trade policy expert at the Centre for European Reform think-tank, said the list of US trade grievances set out by the Trump administration was so extensive — covering not just tariffs but taxes including VAT and online and environmental regulations — that they could never be satisfied. “The US demands on regulation and taxation amount to regulatory subordination,” he said. “That’s not the kind of demand you’d make if you were looking to make a deal — it’s what you’d propose if you’re looking for an excuse to impose tariffs.”

Putting a historic industry at the center of policymaking while under pressure from an erratic US President Donald Trump, an expansionist Russian President Vladimir Putin and an ambitious Chinese President Xi Jinping, makes sense coming from Brussels, according to Sander Tordoir, chief economist at the Centre for European Reform.“I’d consider the EUCO a success, all things considered,” he said. “And the leaders are simply working well together at the moment. But there’s a lot still to be done.” 

John Springford, associate fellow at the Centre for European Reform, said the economic dangers cannot be overestimated. “If Trump imposes a 25% tariff on cars and car parts on the UK, it will reduce exports to the US – but only £7bn of exports would be affected, out of total exports of £800bn. The far bigger costs would arise from an escalating global trade war, even if the UK does not retaliate.

Sander Tordoir, chief economist at the Centre for European Reform, said that the most likely outcome is a “mix” of car price increases in the US and a reduction in EU car manufacturers’ profit margins.He also said that the fact that German manufacturers have plants in the US offers them potential “workarounds” to “dampen the blow” of the tariffs.“They can subtract some of the cars they export from their American plants to the rest of the world,” Tordoir said.