Trump warns of ‘severe’ consequences if EU won’t hold trade talks

US President Donald Trump warned the European Union on Thursday of consequences that will be “severe economically” if Brussels fails to enter trade talks.

The comments came after the European Parliament on Thursday failed to back the launch of trade talks with Washington, dealing an unexpected blow to efforts to avert a trade war.

Trump has threatened to impose tariffs on auto imports, which would hit German carmakers especially hard. Pursuing a trade deal was the central part of a truce agreed in July when Trump and European Commission President Jean-Claude Juncker pledged no new tariffs following the US tariffs on steel and aluminum.

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“The European Union treats us very, very unfairly,” Trump told reporters at the White House.

“They’re willing to talk to us. If they don’t talk to us we’ll do something that will be severe economically. We’ll tariff a lot of their products coming in.” But he added, “It will probably work out. They’re negotiating.” Juncker is working with the European Council on the parameters for negotiations with the United States.

While the parliament only has an advisory role, the setback underlines deep transatlantic divisions: Washington insists the talks include agriculture, but the EU has steadfastly refused.

Powerful Germany deeply wants the deal in order to placate Trump and avoid the auto tariffs that would punish the country’s cherished exports, a prospect Chancellor Angela Merkel has labeled “frightening.”

France is dragging its feet, fearing that entering trade negotiations with Trump could fire up domestic opposition just months ahead of European elections, set for May 22 to 26.