Chancellor Angela Merkel put the brakes on a U.S. envoy’s proposal to German carmakers to take EU-U.S. car tariffs to zero, saying she’s only open to talks that conform with global rules.
The European Union is working on a joint position for tariff talks, possibly including automobiles, and any such negotiations would require equal treatment of all trade partners under World Trade Organization rules, Merkel said at a news conference in Berlin on Thursday.
“Talks on tariffs, on reducing tariffs, for which I’m prepared, can’t only be done with the U.S.,” Merkel said. “Rather, we have to do it with all countries with which we have trade in automobiles, because otherwise it wouldn’t conform with WTO.”
Merkel was responding to a question about calls by a German business group for negotiations to lower U.S. import barriers for German cars to zero. U.S. Ambassador Richard Grenell met the chief executive officers of Volkswagen AG, Daimler AG and BMW AG in Berlin on Wednesday to discuss looming American duties on car imports from the EU.
Grenell told participants the U.S. government was seeking talks with the EU and German government with a proposal to reduce tariffs to zero, Handelsblatt reported. The U.S. embassy didn’t immediately respond to a request for comment.
The EU isn’t allowed under global rules to reduce its 10 percent tariff on American cars unless the bloc either does so for all WTO members or reaches an accord with the U.S. that covers “substantially all” two-way trade.
EU trade chief Cecilia Malmstrom said last week there is “no way” EU governments would agree to scrap the bloc’s car-import duty for all WTO members, leaving the option of going for a broader commercial deal with the U.S.
“You can either discuss a broad swath of tariffs for 90 percent of goods, or you can select particular variants or groups, but then you have to ensure the equal treatment of all global trade partners,” Merkel said. “That could well be an option that I can imagine.”