German industry slams Trump’s car tariff threat, calls for deal

Threats by U.S. President Donald Trump to impose tariffs of around 25% on car imports are a "provocation," Germany's car lobby group said on Wednesday, calling on Brussels to strike a deal with what is its biggest export market.

"Tariffs as a negotiating instrument are the wrong tool. The risk of a global trade conflict with negative consequences for the global economy is high," Hildegard Mueller, president of the VDA, said.

Volker Treier, head of foreign trade at the German Chamber of Commerce and Industry (DIHK), said potential tariffs on car imports as outlined by Trump would significantly hurt Germany's automotive industry in what is an "already bumpy road".

According to VDA and DIHK statistics, around 13% of German car exports go to the United States, more than to any other country, while Germany's automotive industry, both carmakers and suppliers, employ 138,000 staff in the U.S.

Trump on Tuesday said he intended to impose auto tariffs "in the neighborhood of 25%" and similar duties on semiconductors and pharmaceutical imports, having previously said that levies on cars would come as soon as April 2.

"A spiral of tariffs between the USA and the EU would have serious consequences. Protectionism is not a solution, but puts a brake on economic growth on both sides of the Atlantic," Treier said.

Auto executives have suggested that Brussels should bring down the tariffs on U.S. car imports to 2.5% from 10%, which is the current level of U.S. tariffs, even though there is a separate 25% tariff on pickup truck imports.