Angela Merkel and U.S. Auto Makers Voice Concerns as Trump Receives Key Car Tariff Report

February 18, 2019, 12:21 PM UTC

Commerce Secretary Wilbur Ross has made his recommendations to President Donald Trump about whether foreign car imports constitute a “national security risk” to the U.S.

It’s not yet clear what’s in the recommendations—submitted Sunday, hours before a 270-day deadline expired—as they have not been made public. However, many expect the Commerce Department to back up the assertion that car and car-part imports constitute a threat. This would allow the Trump administration to lash out with new tariffs.

Last year, Trump deployed the national-security justification in order to introduce steel and aluminum tariffs.

As in that case, one prominent target of the potential new tariffs would the European Union, in particular Germany, whose cars have annoyed Trump for a long time. The president believes the success of Mercedes-Benz and Audi means fewer jobs for U.S. autoworkers.

German Chancellor Angela Merkel is not at all pleased about the prospect of new tariffs against her country’s pride and joy.

“If we’re serious about the transatlantic partnership, it’s not very easy for me as German chancellor to read… that the American Department of Commerce apparently considers German and European cars to be a threat to the national security of the United States of America,” Merkel said at the Munich Security Conference on Saturday, according to a Politico report. “Look, we’re proud of our cars and we should be allowed to be. And these cars are built in the U.S. The biggest BMW factory is in South Carolina, not in Bavaria.”

The German Association of the Automotive Industry (VDA) also highlighted the job-creation impact of German automakers in the U.S. “All this strengthens the United States and cannot be seen as a security problem,” the industry body said Monday.

The U.S. Motor and Equipment Manufacturers Association also chimed in with a warning over reduced investment. “These tariffs, if applied, could move the development and implementation of new automotive technologies offshore, leaving America behind. Not a single company in the domestic auto industry requested this investigation,” it said in a statement quoted by Reuters.

If the Commerce Department report does give Trump the justification he needs to move ahead with more tariffs, the president has 90 days in which to act. The U.S. currently levies a 2.5% tariff on European car and car-part imports, but Trump has promised to introduce tariffs that are ten times larger.