Bernhard Mattes, President of the German Association of the Automotive Industry (VDA), has warned the US government that US import tariffs would harm US competiveness ‘with severe negative effects on investment and employment in the US’.

Bernhard Mattes – who once headed up Ford’s German operations – delivered a statement this week at the Public Hearing of the US Department of Commerce on the Section 232 National Security Investigation of Imports of Automobiles and Automotive Parts.

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The Department of Commerce investigation – ordered by President Trump – is looking into whether auto imports pose a national security threat. Trump has threatened to impose 20% tariffs on cars imported from the EU.

Mattes said that such additional tariffs on EU imports to the US would undermine the competitiveness of manufacturing facilities in the US.

“This scenario terrifies me – and things can be made worse by counter measures which other countries could take.”

“Tariffs on US [bound] products will not only harm exports, but undermine competitiveness and strengthen other production locations with severe negative effects on investment and employment in the US,” Mattes told the hearing. “This scenario terrifies me – and things can be made worse by counter measures which other countries could take. Such a scenario, rather than free trade between partners, is a risk to national security. US national security relies on its economic performance.”

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He also said that the VDA wants lower tariffs on trade between the US and Europe and would like a free trade agreement, eventually.

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“We share ideas of lowering and eventually abolishing tariffs and other barriers to trade in the framework of a larger agreement between Europe and the US,” he said. “We would appreciate if you and your partners in Brussels would proceed on this path. The EU and the USA together account for 50 percent of world trade. In light of fast growing new actors on the scene it is my firm conviction that we should shape the future together.”

He added: “Our companies, manufacturers and suppliers, are passionate about and proud of their investment in the US. And let me add, we feel that we are part of the American Dream – because what our members share is passion and responsibility, bringing jobs, skills and prosperity to the US and its people.”

German chancellor Mrs Angela Merkel recently raised the possibility of reduced EU tariffs applying to US car imports (currently 10% versus 3% on EU cars imported to US; 25% on EU-made trucks) to the EU bloc as part of a deal that could avert the threat of new import tariffs on EU car imports in the US.