On the sidelines of the Munich Security Conference, the German Chancellor Angela Merkel labelled as "frightening" tough US trade rhetoric on February 16th, planning to declare European car imports to the US a national security threat. "If these cars...suddenly spell a threat to US national security, then that is frightening to us," she said. Moreover, she pointed out that the biggest car plant of the 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 conference and added, "then we will find a solution."
Auto imports threaten national security, setting the stage for possible tariffs by the White House, according to a US Commerce Department report, when it was mentioned by two people familiar with the matter on February 14th.
Apparently, the investigation, ordered by President Donald Trump in May 2018, is "positive" with respect to the main 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 February 17th, is perceived as a major risk for foreign automakers. Trump has threatened to slap 25% duties on European autos, especially targeting Germany, which he said harmed the American car industry.
After receiving the report, the US president will have 90 days to decide whether to move ahead with tariffs. In July 2018, Trump made a trade truce with European Commission President, Jean-Claude Juncker, when both of them pledged no new tariffs would be imposed as negotiations continued.