EU offers to eliminate auto tariffs — Trump says, 'It's not good enough'

The European Union will respond in kind if U.S. President Donald Trump reneges on his pledge not to impose car tariffs, European Commission President Jean-Claude Juncker said as trade tensions between Europe and the United States rose again.

Juncker told German broadcaster ZDF on Friday that the EU would not let anyone determine its trade policies. If Washington decided to impose tariffs on vehicles after all, he said, "then we will also do that."

Europe, in negotiations with the U.S., offered to reduce its car  tariffs to zero, if the United States did the same, going beyond the provisional agreement struck in July which referred only to "non-auto industrial goods."

Trump, in an interview with Bloomberg, said of the EU proposal to scrap auto tariffs: "It's not good enough."

"Their consumer habits are to buy their cars, not to buy our cars," Trump added, according to Bloomberg.

"The European Union is almost as bad as China, just smaller," Bloomberg also quoted Trump as saying.

Trump also threatened in the same interview to withdraw from the World Trade Organization if "they don't shape up" — a move that would further undermine one of the foundations of the modern global trading system.

Trump agreed in July to hold back on threatened 25 percent car tariffs while the United States and Europe talked about cutting other trade barriers, but U.S. officials have grown frustrated about the slow pace of progress.

Speaking to the trade committee of the European Parliament on Thursday, European Trade Commissioner Cecilia Malmstrom said the EU had "profound disagreements" with the United States.

Juncker said he had negotiated a "ceasefire agreement" on trade with Trump in July and while such deals were often jeopardized, they were generally respected.

Chancellor Angela Merkel is due to meet Juncker on Tuesday, German government spokeswoman Ulrike Demmer said on Friday. She declined to comment on Trump's latest remarks but said Germany fundamentally sought to lower trade barriers and promote free trade.

The trade issue is also likely to be addressed when Merkel meets French President Emmanuel Macron in France later on Friday.

The EU remains at odds with the United States over the U.S. blocking of the appointment of judges at the World Trade Organization, over tariffs set for reasons of national security, and over Washington's tough stance towards China.

The European Union shared U.S. criticism of China over industry subsidies, state intervention and forced technology transfers, but believed its approach was wrong, Malmstrom said.

"We share those concerns, but we do not agree with their methods of imposing massively billions of tariffs on China, as they have also done with Turkey. We do not share U.S. view that trade wars are good and easy to win," the commissioner said.

Malmstrom said a working group that she and U.S. Trade Representative Robert Lighthizer will oversee on the issue was not engaged in formal negotiations.

She reiterated that the EU would be willing to reduce its car tariffs to zero if the United States did the same.