November 30, 2018 / 11:43 AM / 16 days ago

Don't undermine EU trade stance, Merkel ally warns German car chiefs

BERLIN (Reuters) - A top ally of Chancellor Angela Merkel warned German car bosses on Friday not to undermine the European Union’s united negotiating stance on U.S. trade tariffs when they meet senior officials in Washington next week.

Christian Democratic Union (CDU) candidate for the party chair Annegret Kramp-Karrenbauer is pictured during a Reuters interview in Berlin, Germany, November 30, 2018. REUTERS/Fabrizio Bensch

Annegret Kramp-Karrenbauer, who is leading the race to succeed Merkel as head of the Christian Democratic Union, said she was concerned about plans by top executives from Volkswagen (VOWG_p.DE), BMW (BMWG.DE) and Daimler (DAIGn.DE) to meet at the White House on trade policy.

“In the past, it has only been possible to avert punitive tariffs when we maintained a clear and strong position, for instance as the European Union,” she told Reuters. “Given that, one must take care not to undermine such a strong, united political position through bilateral discussions.”

President Donald Trump has lambasted German automakers and what he sees as an unfair trade imbalance in the sector. He has threatened for months to impose tariffs on vehicles assembled in the EU, a move that could upend the industry’s business model for selling cars in the United States.

The German chancellery said on Friday it was aware of the idea of a meeting between the car bosses and U.S. officials, and stressed that the European Commission was responsible for negotiating with the U.S. administration on trade and tariffs.

Executives from the German car companies are finalizing plans for the meeting at the invitation of the U.S. ambassador to Germany, Richard Grenell.

U.S.-based officials from the carmakers, asking not to be named, said a meeting was tentatively set for Tuesday, and would include VW Chief Executive Herbert Diess, Daimler CEO Dieter Zetsche and BMW production chief Oliver Zipse.

The CEOs plan to make clear they cannot negotiate on behalf of the EU, people close to the matter said last week.

U.S. Trade Representative Robert Lighthizer and Commerce Secretary Wilbur Ross are expected to join the meeting, although this has yet to be confirmed.

While Trump has thus far refrained from imposing tariffs, U.S. officials have grown frustrated about the slow pace of progress on solving U.S.-EU trade disputes.

Grenell told an event sponsored by AmCham Germany that he was optimistic a solution could be found.

“Yes it is true, we are trying to solve the car issue,” Grenell said. “I am very hopeful,” he said. It was not immediately clear if Grenell would attend the meeting.

The United States currently imposes import tariffs on cars assembled in the EU of 2.5 percent, compared with 10 percent tariffs for U.S.-built cars entering the European trading bloc.

Reporting by Andrea Shalal, Gernot Heller and Michelle Martin; Editing by Tassilo Hummel and David Stamp

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