German Automakers Hope to Defuse Tariffs Threat by Trump on Imports

Leaders from the auto industry in Germany are telling officials in the Trump administration that a trade war with the U.S. could cause global business to suffer irreparable damage.

The CEOs of Daimler, BMW and Volkswagen met on Wednesday in Germany with the U.S. ambassador to discuss the looming American tariffs on European Union car imports, according to those familiar with the situation.

The meeting’s intent was to form a direct link to the White House administration, said those in the know. The head of Continental AG, the parts maker, also attended the meeting.

U.S. Ambassador Richard Grenell told those attending the meeting that the U.S. wants to hold talks with the German government and the EU with a proposal to lower the pending tariffs to zero.

That is in contrast to the proposal by President Donald Trump last month for a tariff of 20% on autos imported from the EU, part of Trump’s campaign seeking concessions to help lower the trade deficit in the U.S.

Automakers and suppliers have expressed that they would be in favor of bilateral removal of tariffs. This initiative by automakers coincides with other new proposals that are said to be under consideration by officials in the EU to prevent the worsening of the global trade war.

Trump ordered officials to begin a probe of whether imports of vehicles and vehicle parts damage the U.S. national security. He is also amidst an escalating back-and-forth with China, which could result in a tariff of 40% on German vehicles made in U.S. that are shipped to China.

The EU officials are reviewing a proposal that would cut the tariffs between the world’s largest nations for car-exporting including the U.S., Japan and South Korea.

In separate action, the Economy Minister in Germany Peter Altmaier will travel next week to Paris to help in the coordination of a new initiative by the EU for talks with the U.S. related to the tariffs on steel.

Automakers en masses responded last month to the proposed tariffs by the U.S. on imported cars, saying they would hurt the auto industry in the U.S. and companies abroad as well.

The EU under global rules is not allowed to lower its tariff of 10% on U.S. cars unless the entire bloc either does the same for members of the World Trade Organization as a whole or a bilateral accord is reached with the U.S. covering substantially all of two-way trade.

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