German industry groups warn US on tariffs before Trump-Juncker meeting

German Economy and Energy Minister Peter Altmaier holds a joint news conference with European Commission Vice-President Maros Sefcovic (not pictured) on 17 July 2018. [Omer Messinger/EPA/EFE]

German industry groups warned on Sunday (22 July), before European Commission President Jean-Claude Juncker meets US President Donald Trump this week, that tariffs the United States has imposed or is threatening to introduce risk harming America itself.

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. Juncker will discuss trade with Trump at a meeting on Wednesday.

Juncker to meet Trump in Washington on 25 July

European Commission President Jean-Claude Juncker will meet with US President Donald Trump at the White House on 25 July in an attempt to repair the strained relations between the transatlantic allies.

“The tariffs under the guise of national security should be abolished,” Dieter Kempf, head of Germany’s BDI industry association said. Juncker should tell Trump that the United States would harm itself with tariffs on cars and car parts, he told Welt am Sonntag newspaper.

The German auto industry employed more than 118,000 people in the United States and 60% of what they produced was exported. “Europe should not let itself be blackmailed and should put in a confident appearance in the United States,” he added.

Trump threatens 20% levy on all European cars

US President Donald Trump threatened on Friday (22 June) to impose a 20% import tariff on all cars manufactured in the EU if recent sanctions the bloc slapped on Washington are not “broken down and removed”, continuing the tit for tat trade war with America’s nominal allies.

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.

EU officials have tried to lower expectations about what Juncker can achieve, and played down suggestions that he will arrive in Washington with a novel plan to restore good relations.

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.”

Germany would not be the main victim of Trump’s car tariffs

In May 2018, Donald Trump commissioned the US Department of Commerce to investigate whether car imports constitute a threat to US national security. It would seem so according to figures, but that is no more than an excuse to impose tariffs, writes Dr Clemens Fuest.

He said he hoped job losses could be avoided but noted that trade between Europe and the United States made up around one third of total global trade.

“You can imagine that if we go down with a cold in the German-American or European-American relationship, many others around us will get pneumonia so it’s highly risky and that’s why we need to end this conflict as quickly as possible.”

Eric Schweitzer, president of the DIHK Chambers of Commerce, told Welt am Sonntag the German economy had for decades counted on open markets and a reliable global trading system but added: “Every day German companies feel the transatlantic rift getting wider.”

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