Washington needs to de-escalate its rhetoric and cease using tariffs under the guise of national security, the president of the powerful Federation of German Industries (BDI) said on Monday (23 July) in Berlin, ahead of Wednesday’s meeting between US President Donald Trump and European Commission chief Jean-Claude Juncker.
“Commission President Juncker and US President Trump must apply the emergency brake in the trade dispute. For this, Washington needs to de-escalate the rhetoric. The tariffs imposed under the guise of national security should be removed,” Dieter Kempf, said.
“It is now important to establish a common understanding of the facts and regain trust,” he added while urging the Commission president to make it clear that the US is damaging itself by imposing tariffs on motor vehicles and parts.
The German car industry alone employs more than 118,000 people in the US. 60% of its production is exported from the US to other countries.
Kempf pointed out that Europe is one of the largest trading powers in the world and as such must make it clear that international trade disputes must be dealt with and resolved within the framework of the World Trade Organisation (WTO).
Unilateral trade policies outside of WTO rules are harmful to economic development around the world, including in the US, he also said.
“Europe should not allow itself to be blackmailed and should behave confidently in the US,” Dieter Kempf stressed.
No specific trade offer
Juncker will not arrive in the United States for talks with Trump with a specific trade offer, the Commission said at a press briefing on Monday.
“I do not wish to enter into a discussion about mandates, offers because there are no offers. This is a discussion, it is a dialogue and it is an opportunity to talk and to stay engaged in dialogue,” Commission spokesperson Margaritis Schinas told reporters at a news conference.
“It is an opportunity to de-dramatise any potential tensions on trade and to engage into an open, constructive dialogue with our American partners,” he also said.
A German government spokeswoman also said on Monday “it is good that the United States and Europe are maintaining dialogue despite their differences.”
Citing national security grounds, Washington imposed tariffs on steel and aluminium imports from the EU, Canada and Mexico on June 1, and Trump is threatening to extend them to EU cars and car parts.
German Economy Minister Peter Altmaier told Deutschlandfunk radio on Sunday he hoped it was still possible to find a solution that was attractive to both sides. “For us, that means we stand by open markets and low tariffs,” he said.
He said the possibility of US tariffs on EU cars was very serious and stressed that reductions in international tariffs in the last 40 years and the opening of markets had resulted in major benefits for citizens.
Altmaier said it was difficult to estimate the impact of any US car tariffs on the German economy but added: “Tariffs on aluminium and steel had a volume of just over six billion euros. In this case, we would be talking about almost ten times that.”