Automaker Shares Soar on U.S. Proposal to Eliminate Tariffs

Washington DC July 5, 2018; The AIADA reported that shares in European carmakers are having their best trading day in two years after a U.S. official floated a proposal to eliminate vehicle-import tariffs on both sides of the Atlantic.

According to Bloomberg, German auto-industry executives met with U.S. Ambassador to Germany Richard Grenell Wednesday, where he was said to have told participants Washington was seeking talks with the European Union and Berlin on lowering car duties to zero.

Trump's repeated salvos on trade and push to extract better terms for the U.S., often singling out German carmakers, have prompted various initiatives to avert a full-blown trade war at the European level, which decides trade policy for the bloc.

The EU has warned that a 25 percent tariff on U.S. imports would add 10,000 euros ($11,684) to a European-built car's sticker price. The automakers' meeting and U.S. proposal come as the EU is considering new plans to alleviate worsening trade tension.

Trump has ordered a probe into whether imports of cars and car parts damage national security. He's also engaged in a tit-for-tat escalation with China, which will result in a 40 percent tariff on U.S.-made cars – many of them German brands – shipped into the Asian country.