‘US calling European cars a threat is frightening’

Munich: German Chancellor Angela Merkel on Saturday labelled as "frightening" tough US trade rhetoric planning to declare European car imports a national security threat.

"If these cars... suddenly spell a threat to US national security, than that is frightening to us," she said. Merkel pointed out that the biggest car plant of German luxury brand BMW was not in Bavaria but in South Carolina, from where it exports vehicles to China. "All I can say is it would be good if we could resume proper talks with one another," she said at the Munich Security Conference. "Then we will find a solution."

A US Commerce Department report has concluded that auto imports threaten national security, setting the stage for possible tariffs by the White House, two people familiar with the matter said Thursday.

The investigation, ordered by President Donald Trump in May, is "positive" with respect to the central question of whether the imports "impair" US national security, said a European auto industry source.

"It´s going to say that auto imports are a threat to national security," said an official with another auto company.

The report, which is expected to be delivered to the White House by a Sunday deadline, has been seen as a major risk for foreign automakers.

Trump has threatened to slap 25 percent duties on European autos, especially targeting Germany, which he says has harmed the American car industry. After receiving the report, the US president will have 90 days to decide whether to move ahead with tariffs.

Trump in July reached a trade truce with European Commission President Jean-Claude Juncker, with the two pledging no new tariffs while the negotiations continued.

Brussels has already drawn up a list of 20 billion euros ($22.6 billion) in US exports for retaliatory tariffs should Washington press ahead, the commission´s Director-General for Trade Jean-Luc Demarty told the European Parliament last month. The White House has used the national security argument -- saying that undermining the American manufacturing base impairs military readiness, among other claims -- to impose steep tariffs on steel and aluminium imports, drawing instant retaliation from the EU, Canada, Mexico and China.