The European Union is highly concerned by Trumps threats to add new import tariffs on EU goods, especially cars

The European Union is highly concerned by Trump's threats to add new import tariffs on EU goods, especially cars

German Chancellor Angela Merkel has raised the possibility of reduced EU tariffs applying to US car imports to the bloc as part of a deal that could avert the threat of new import tariffs on EU car imports in the US.

US President Donald Trump has launched an investigation by the Department of Commerce into whether auto imports pose a national security threat and has threatened to impose 20% tariffs on cars imported from the EU.

According to Reuters, Mrs Merkel said she would back lowering EU tariffs on US car imports in response to an offer from Washington to abandon threatened levies on European cars in return for concessions.

The Reuters report noted that she added EU tariff negotiations required a "common European position and we are still working on it."

Reuters reported that the US ambassador to Germany, Richard Grenell, has repeatedly met with executives of German carmakers and major suppliers to discuss the issue.

An industry source told Reuters earlier that Grenell had told German auto execs that Trump could abandon his threats if the EU scrapped duties on US cars.

Merkel also reportedly said that any move to cut tariffs on US vehicles would require reductions on those imported from other countries to conform with WTO rules.

The Financial Times also reported that Brussels is considering talks on a tariff-cutting deal between the world's big car exporters to prevent an all-out trade war with the US. The idea is being studied by EU officials ahead of a meeting between Jean-Claude Juncker, president of the European Commission, and President Donald Trump in Washington this month.

The FT said that three diplomats said the European Commission was studying whether it would be feasible to negotiate a deal with other big car exporters such as the US, South Korea and Japan. Such a move, it said, could address Mr Trump's complaint that the US sector is unfairly treated, while reducing export costs for other participating countries' auto sectors.

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