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CCTV Script 28/05/19

— This is the script of CNBC's news report for China's CCTV on May 28, 2019, Tuesday.

At present, the trade dispute between the United States and the European Union is mainly reflected in the import and export of automobiles, that's because about half of the U.S. trade deficit with the European Union comes from autos. Therefore, the automobile industry has become the main battlefield of the game between the two sides. The United States demanded that the European Union follow "automatic export restrictions" .The rules mean that the EU will impose quotas on cars and parts exported to America, once the quota is exceeded, it will stop exporting.

We know that the top five sources of US auto imports are Canada, Japan, Mexico, Germany and South Korea

European Union members Germany, Britain, Italy, Sweden, Slovakia, Hungary, Finland and Spain are among the top 15 sources of imported cars in the United States. Currently, US imposes quota restriction in the new agreement with Canada and Mexico successfully, so, Trump admin who has been aware of the benefits is seeking to reach similar agreement with EU and Japan.

But the EU now says it firmly rejects any automatic export restrictions, because it abides by the world trade organization's MFN. The principle is to ensure that any trade preference given by one member of the WTO to another is immediately and unconditionally given to all other members, in order to ensure that all members compete fairly on the same level.

After countries such as Sweden and France explicitly rejected the Trump administration's terms, the EU said it would impose retaliatory tariffs on 20 billion euros of American goods, including U.S. exports of truck, printers and suitcases, if necessary.

As a result, in the following EU-US trade negotiations, we are likely to see a fiercer situation. And we do not rule out the situation that increasing tariffs bilaterally.