BMW CEO Oliver Zipse is set to propose that the European Union reduce its tariff on US car imports from 10% to 2.5%, aligning with the current US import tariff.

This suggestion comes on heels of US President Donald Trump’s recent threat to impose tariffs on products and regions including the European Union and was considering a 10% tariff on Chinese imports.

Although Trump has not yet executed the range of tariffs he had indicated, he maintains that they remain a possibility, reported Reuters.

In the company’s blog post, Zipse said: “Our balanced global setup makes us resilient and competitive. Nevertheless, free trade is of immense importance worldwide: It is one of the most crucial drivers of growth and progress.

“Tariffs, on the other hand, hinder free trade, slow down innovation, and set a negative spiral in motion. That is why we should be discussing fewer rather than more trade barriers.

“The EU could take a major first step here: while import tariffs for vehicles from the US into Europe are ten percent, they are only 2.5% in the other direction. Let’s create a level playing field: a tariff rate of 2.5% on both sides. Consumers would also benefit from this: Because high tariffs make products more expensive and less innovative.”

The proposal follows comments from Mercedes-Benz CEO Ola Kaellenius and European auto association ACEA new president, who suggested this month that the EU should negotiate a "grand bargain" with Trump to prevent a trade war.

The European Commission is preparing to hold discussions with European automakers, suppliers, and trade unions on 30 January 2025.

The talks will focus on addressing the challenges facing Europe's automotive industry, including plant shutdowns and job cuts due to low demand, high costs, and competition from China.

In November 2024, Reuters reported that BMW downplayed concerns about the potential impact of US import tariffs on BMW, highlighting the company's substantial manufacturing presence in the US as a potential advantage.

Recently, BMW and Tesla both filed cases with the European Union’s (EU) Court of Justice challenging the EU’s decision to hike tariffs on battery electric vehicles (BEVs) made in China.