Skip to main content

German Chancellor Angela Merkel said on Thursday she would back lowering European Union tariffs on U.S. car imports, responding to an offer from Washington to abandon threatened levies on European cars in return for concessions.

However, she added EU tariff negotiations required a “common European position and we are still working on it.”

U.S. President Donald Trump threatened last month to impose a 20-percent import tariff on all EU-assembled vehicles, part of a tough line on trade that has raised tensions across the world and which could upend the EU industry’s current business model for selling cars in the United States.

Story continues below advertisement

The U.S. ambassador to Germany, Richard Grenell, has repeatedly met with executives of German car makers Volkswagen (VW), BMW and Daimler and automotive suppliers including Continental, most recently on Wednesday, to discuss the issue.

An industry source told Reuters earlier that Grenell had mentioned to the executives that Trump could abandon his threats if the EU scrapped duties on U.S. cars imported into the bloc.

A spokesman for the embassy said no formal offer on tariffs had been made, and that Grenell’s goal was rather to explore the options for a wider transatlantic trade agreement.

“That is an ongoing process,” the spokesman said.

VW, BMW, Daimler and Continental declined to provide details of Wednesday’s discussion with Grenell.

Automotive stocks rose nonetheless on Thursday, on hopes that U.S. tariffs may not come after all. At 1330 GMT, shares in VW, BMW and Daimler were all up 4 per cent from Wednesday’s close. Continental was 2.5 per cent higher.

Merkel said any move to cut tariffs on U.S. vehicles would require reductions on those imported from other countries to conform with World Trade Organization rules.

Story continues below advertisement

“I would be ready to support negotiations on reducing tariffs, but we would not be able to do this only with the U.S.,” 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.

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.

Report an error
Comments

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to letters@globeandmail.com. Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to letters@globeandmail.com. Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff.

We aim to create a safe and valuable space for discussion and debate. That means:

  • All comments will be reviewed by one or more moderators before being posted to the site. This should only take a few moments.
  • Treat others as you wish to be treated
  • Criticize ideas, not people
  • Stay on topic
  • Avoid the use of toxic and offensive language
  • Flag bad behaviour

Comments that violate our community guidelines will be removed. Commenters who repeatedly violate community guidelines may be suspended, causing them to temporarily lose their ability to engage with comments.

Read our community guidelines here

Discussion loading ...

Due to technical reasons, we have temporarily removed commenting from our articles. We hope to have this fixed soon. Thank you for your patience. If you are looking to give feedback on our new site, please send it along to feedback@globeandmail.com. If you want to write a letter to the editor, please forward to letters@globeandmail.com.
Cannabis pro newsletter