German Chancellor Angela Merkel said on Thursday she would back talks on lowering E.U. automobile tariffs on U.S. car imports, but underscored that such negotiations could only be carried out with “all the countries with which we have trade in cars,” and not the United States alone.
“We can either have negotiations about a wide range of tariffs, for 90 percent of goods, or we can talk about one type of goods, but then we must accord the same treatment to all trading partners of the world. That can be an option that I can imagine,” Merkel said.
Merkel’s comments come after U.S. Ambassador to Germany Richard Grenell hosted executives from top German car firms on Wednesday, where he called on the E.U. to eliminate tariffs on car imports in exchange for equal treatment by the United States.
On Wednesday, Merkel suggested that a trade war with the U.S. was still avoidable.
“This resembles a trade conflict and I don’t want to use other words,” Merkel said to German lawmakers. “It is worthwhile to prevent this conflict from becoming a real war but there are two sides to this.”
In June, United States President Donald J. Trump proposed a 20 percent tariff on all imported cars, saying tariffs and trade barriers have “long been placed on the U.S. & its great companies and workers by the European Union.”
The U.S. Department of Commerce initiated a Section 232 Investigation to consider the effect of car imports on the national security. Section 232 of the Trade Expansion Act of 1962 gives the executive branch the power to determine the threat that certain imports may pose to the nation and will include domestic capacity and production to meet national defense requirements, as well as losses of skills or investments in the national economy.
“We hope the Trump Administration will take targeted measures to boost domestic manufacturing and strengthen our economic and national security for this and future generations,” the United Automobile, Aerospace and Agricultural Implement Workers of America said in a public comment on the investigation.
Section 232 was invoked by the Trump administration to levy steel and aluminum tariffs earlier this year. Those tariffs prompted the European Union to create tit-for-tat tariffs for iconic American goods including bourbon, jeans and Harley-Davidson motorcycles.
The high-stakes decision could affect auto and other industries in the U.S. and E.U. alike.
“The good functioning of the global economy depends on us working together in a spirit of partnership,” Merkel said, “and Germany will support it.”