The White House may be poised to impose tax duties on several industries in the European Union (EU) as the French Senate is expected to pass a proposed tech tax policy that will force American firms to pay tax duties to France.
Late on Tuesday, German Transatlantic Coordinator and Parliament member, Peter Beyer, said U.S. President Donald Trump's administration may be ready for tariff impositions on the car import sectors of EU member countries sometime mid-November as tensions over the tech tax heighten.
Beyer noted that the EU should be prepared for potential tax duties that could hurt the auto sector as a whole. It is worth noting that the EU is one of the United States' biggest trading partners in the auto industry. Dents on this relationship could mean another beating on the global economy.
It's not just the auto sector that could be affected in the ensuing tax war between France and the United States. Beyer said tariffs may also be imposed on the Nord Stream 2 gas pipeline as well as several aircraft subsidies.
If Beyer's forecasts come true, a number of international industries could weaken, hampering growth in various segments and potentially paving the way towards another economic crisis as is being felt under the China-U.S. trade war.
Trump was already poised to impose tariffs on EU vehicle component imports, labeling these as a national security threat to the U.S. However, he postponed the tariff calls, stating that the White House was willing to negotiate.
Beyer further explained that there is "quite a lot of impatience on the U.S. side." Despite the potential tariff roll outs late this year, he called on "the European side to be strong and unified" amid the tensions.
While Beyer said he thinks car import tariffs will be rolled out by November, sanctions on the Nord Stream 2 project may also be imposed earlier - sometime next month or in September.
Meanwhile, German Economy Minister Peter Altmaier said on Wednesday that the U.S. and EU may strike a deal by year-end if both political sides show sincerity to reach an agreement.
Altmaier further confirmed that the EU is prepared to negotiate about trade terms with the U.S. side. The ongoing trade dispute between the two sides revolves largely around the potential inclusion of agriculture products in the highly-anticipated deal.
However, some analysts said the ongoing spat between the French government and Washington may further delay negotiations regarding a U.S.-EU trade deal. It is unclear if the two countries are holding talks about a potential truce on the issue.