Things are heating up once again on the trade front between the EU and the US. On Monday, an EU official stated that the Union is willing to cooperate with the US on reforms to the WTO and to tackle common global trade challenges. However, if the US government raises tariffs on its cars, it will have to retaliate.

These statements were made by the Director General of Trade at European Commission, Sabine Weyand, during her first official visit to Washington. She also added that the EU is keen on avoiding a tariff war with the US and would be more keen to cooperate with the US on addressing mutual concerns surrounding China’s dominance in world trade.

However, threats of sanctions would not bode well as the EU considers them to be illegal under WTO rules. The EU is willing to work with the US on issues of managed trade instead of resorting to escalating trade conflicts, as the US and China have been doing for the past year.