EU has a $39 billion retaliatory tariff list if U.S. hits its cars

The European Union will retaliate with extra duties on $39 billion (35 billion euros or £31.4 billion) worth of U.S. goods if Washington imposes punitive tariffs on EU cars, the bloc's trade chief said on Tuesday.

"We will not accept any managed trade, quotas or voluntary export restraints and, if there were to be tariffs, we would have a rebalancing list," European Trade Commissioner Cecilia Malmstrom told a committee of the European Parliament.

"It is already basically prepared, worth 35 billion euros. I do hope we do not have to use that one," she continued.

President Donald Trump declared in May that some imported vehicles and parts pose a national security threat. But he delayed for six months a decision on whether to impose tariffs to allow time for trade talks with the EU and Japan. That six months ends in mid-November.

"We welcome the decision by the U.S. not to impose duties on cars and car parts, but of course the very notion that European cars can be a national security threat to the U.S. is absurd," Malmstrom said.

She added that trade talks with the United States had produced mixed results.

There had been progress on a deal to make it easier for companies to show their products meet the standards of the EU or U.S. market, but none on a proposed deal to remove tariffs on industrial goods.

"We have still not started those negotiations. The U.S. is not ready to start them if agriculture is not included, which is a red line for us. So for the moment, nothing happens here," Malmstrom said.

The EU trade chief also said she hoped that the European Union and the United States could find a settlement in a long-running dispute over government aid for U.S. planemaker Boeing and European rival Airbus. An arbitrator for the World Trade Organization is expected to decide in September what level of sanctions Washington can impose related to European subsidies for Airbus, with the EU likely to get a decision on sanctions early next year.

"We would hope we can close that chapter in our relationship and hope to find a way forward," Malmstrom said.