Report: German Carmakers Favor Dropping EU Tariffs on U.S. Cars

Germany’s carmakers support an end to the EU’s 10% import tax on cars if lifting that tariff would end President Donald Trump’s threat to slap a 25% duty on foreign cars, sources tell The Wall Street Journal.

Today Hakan Samuelsson, CEO of Volvo Car Corp., offered support for the move. He tells the Financial Times that it’s in the best interests of both Europe and China to harmonize their tariffs to “the lowest possible level.”

Trump is insisting that Europe cut its import duties at least enough to match the 2.5% tax charged by the U.S. on imported cars. The German proposal would end all tariffs on both ends—including the current 25% import tax levied by the U.S. on foreign-made pickup trucks, SUV/crossovers and large vans.

Richard Grenell, the U.S. ambassador to Germany, has met with BMW, Daimler and Volkswagen about the proposal and is expected to report to the White House today, according to the report. All three of the German carmakers have vehicle assembly operations in the U.S.

Complying with the German producers’ request to drop tariffs on foreign trucks and vans may be difficult for Trump, the Journal notes. It points out that U.S. auto workers, who supported Trump’s election, aren’t likely to favor a move that increases competition in America’s highly profitable truck sector.