US offers German car bosses 'zero tariffs' solution to trade row: Report

Volkswagen cars are displayed at a Volkswagen dealership in Richmond, California on Feb 23, 2018.
Volkswagen cars are displayed at a Volkswagen dealership in Richmond, California on Feb 23, 2018.PHOTO: AFP

BERLIN (REUTERS) - The US ambassador to Germany has told German car bosses that President Donald Trump would suspend threats to impose tariffs on cars imported from the European Union if the bloc lifted duties on US cars, a German newspaper reported on Wednesday (July 4).

Handelsblatt said Ambassador Richard Grenell told executives from Daimler, Volkswagen and BMW during a meeting that in exchange Trump wanted the EU to annul duties on US cars imported to the bloc.

Trump threatened last month to impose a 20-per-cent import tariff on all EU-assembled vehicles, which could upend the industry’s current business model for selling cars in the United States.

Handelsblatt cited people present at the meeting, which took place at the US embassy in Berlin on Wednesday. It said the chief executives of Daimler, BMW and Volkswagen – Dieter Zetsche, Harald Krueger and Herbert Diess respectively – were in attendance.

Daimler and Volkswagen declined to comment. BMW was not immediately available for comment.

A spokeswoman for the German Economy Ministry also declined to comment on the report, saying issues related to the trade dispute with the United States were being handled by the European Commission in Brussels on behalf of EU member states.

A European Commission spokeswoman declined to comment on the report. She said Commission President Jean-Claude Juncker would discuss trade during talks with Trump in Washington later this month.

“This will be an opportunity to discuss the many issues of common interest, notably also relating to trade,” the spokeswoman said.

Current US import tariff rates on cars are 2.5 per cent and on trucks 25 per cent. The EU has a 10 per cent levy on car imports from the United States.

Trump hit the EU, Canada and Mexico with tariffs of 25 per cent on steel and 10 per cent 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 per cent 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.