Concerns are mounting again in the European Union over the possible imposition of new trade barriers for European cars and components. This week a series of meetings is expected to be held to discuss this matter, Kallanish notes.
US president Donald Trump and EU president Jean-Claude Juncker agreed a truce on new trade barriers in July. This truce is set to continue only until the end of this year however, as was confirmed recently in a speech by Juncker. Trump, meanwhile, is pushing forward data and analyses relating to the effects of the possible imposition of new tariffs on the import of cars and components from the EU.
Meanwhile EU trade commissioner Cecilia Malmstrom is set to meet again in Washington with US Trade Representative Robert Lighthizer to discuss further opportunities of a new trade agreement. This could eventually cover the issues related to the automotive trade as well as to steel.
Possible new trade barriers from the US could significantly hit the already-fragile European car sector. Demand for cars in Europe is under pressure due to the new regulations on diesel engines and the relatively negative trend seen in recent months could continue into the beginning of 2019. The effect of this has been to lower steel demand from the automotive sector in the EU, thus generating downward pressure on flat product prices, especially for HDG.