BERLIN (July 5): German Chancellor Angela Merkel said on Thursday she would back lowering European Union tariffs on US car imports, responding to an offer from Washington to abandon threatened levies on European cars in return for concessions.
"When we want to negotiate tariffs, on cars for example, we need a common European position and we are still working on it," Merkel said.
US President Donald Trump threatened last month to impose a 20% import tariff on all EU-assembled vehicles, which could upend the industry's current business model for selling cars in the United States.
According to an industry source, the US ambassador to Germany told German car bosses from BMW, Daimler and Volkswagen at a meeting on Wednesday that Trump could abandon such threats if the EU scrapped duties on US cars imported into the bloc.
Merkel said any move to cut tariffs on US vehicles would require reductions on those imported from other countries to conform with World Trade Organization rules.
"I would be ready to support negotiations on reducing tariffs, but we would not be able to do this only with the US," she said.
German automotive trade body VDA said any suggestions about mutually removing tariffs and other trade barriers were positive signals.
"But it is clear that the negotiations are exclusively being held at a political level," it said in a statement.
Current US import tariff rates on cars are 2.5% and on trucks 25%. The EU has a 10% levy on car imports from the United States.
Trump hit the EU, Canada and Mexico with tariffs of 25% on steel and 10% on aluminium at the start of June, ending exemptions that had been in place since March.
The EU executive responded by imposing its own import duties of 25% on a range of US goods, including steel and aluminium products, farm produce such as sweetcorn and peanuts, bourbon, jeans and motor-bikes.
Trump's protectionist trade policies, which also target Chinese imports, have raised fears of a full-blown and protracted trade war that threatens to damage the world economy.