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The Trump Administration Took Its New Plan to Avoid an EU-U.S. Trade War to a Secret Meeting With German Carmakers

It was a busy Independence Day: U.S. Ambassador to Germany Richard Grenell reportedly had a secret meeting yesterday with major German carmakers in Berlin to discuss ways to avoid an EU-U.S. trade war.

Handelsblatt reports that Grenell’s proposal to the CEOs of BMW, Volkswagen and Daimler was that both sides remove car import tariffs altogether. The carmakers were receptive to the idea, insiders said.

President Donald Trump has threatened import taxes of 20% on cars coming to the U.S. from Europe as retaliation for existing EU tariffs on American steel and aluminum. Currently, autos imported to the EU have a 10% tariff, and cars imported to the U.S. have a 2.5% tax.

An EU report estimated that direct effects of such a tariff on EU car imports would cost Americans $13 billion to $14 billion, and indirect costs could total nearly $300 billion. The U.S. Commerce Department will be releasing a report later this month on the national security effects of car imports.

The EU Commission had been considering making one-on-one agreements with carmakers in the U.S., South Korea and Japan. Trump is said to prefer such deals to wide-sweeping multilateral agreements.