Speculation swirls over US tariffs on Europe cars

Germany's automotive trade association, the VDA, is robustly reacting to reports that the US could be getting closer to imposing new 25% import tariffs on cars shipped from Europe.

Reports say that US trade officials are believed to have told President Donald Trump that European car imports harm US national security, a controversial basis for the imposition of new tariffs. President Trump is said to be close to approving the new tariffs, which would hit German companies by making their products much more expensive in the US marketplace.

The VDA has said that any decision by the US to label European car and part imports a danger to US national security would be "incomprehensible".

German car companies were responsible for more than 113,000 jobs at some 300 factories in the United States and were the biggest exporters of cars in the country, VDA said.

"All this strengthens the United States and cannot be seen as a security problem," the VDA added.

Last year, Donald Trump ordered the US Commerce Department to probe whether car imports from Europe threatened US national security.

If the department finds that all or some imports do indeed harm national security, the president has 90 days to decide whether to introduce tariffs of up to 25% to wean the US off those imports.

The Greman Handelsblatt newspaper reported on Sunday that German officials were certain the department had told the White House that European car imports do harm US national security.

But Reuters reported that Trump has not decided on whether to introduce new tariffs. Some officials are said to favour a negotiation with the EU to strike a compromise. Others believe that the US position would be bolstered by the leverage of planned 25% import tariffs. Currently, the US levies a 2.5% tariff on European car imports which compares with the EU's Common External Tariff of 10% on car imports.

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