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Abu Dhabi, UAEMonday 23 July 2018

US offers German car bosses ‘zero tariffs’ solution to trade row

US Ambassador Richard Grenell told execs from Daimler, Volkswagen and BMW that Trump wants EU to annul duties on US cars

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

The US ambassador to Germany has told car bosses in the European nation that US 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.

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

Mr 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 US.

The newspaper 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 US 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 European Commission President Jean-Claude Juncker would discuss trade during talks with Mr 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 are 2.5 per cent on cars and 25 per cent on trucks. The EU has a 10 per cent levy on car imports from the United States.

Mr 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, bourbon, jeans, motorbikes, and farm produce such as sweetcorn and peanuts.

Mr 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.