The Trump administration is considering tariffs on imported cars, citing national security concerns. If it happens, it endangers one of the most important German industries and could unleash a €20 billion list of counter-tariffs.
Those in the audience watching Angela Merkel give a provocative speech may not have realized that they were seeing the first shots fired in a trade war. At the Munich Security Conference last weekend, the German chancellor said US plans to impose tariffs on German auto imports because of national security were “frightening.”
The chancellor’s unusual outspokenness marks the beginning of a new and dangerous phase in European-US trade relations. Last week, a US Trade Department report apparently raised the possibility of imposing a 25 percent tariff on European car imports for reasons of “national security.” The US president, no fan of free trade, must decide on a course of action within 90 days.