The European Union imposes a 10 percent tariff on cars imported from the U.S. The U.S. tariff on European made cars is now 2.5 percent. The report cited unnamed US and European diplomats.
President Donald Trump allegedly wants to ban imports of German-made vehicles or at least that's what he is telling foreign leaders. Some German manufacturers like BMW actually produce more vehicles in the United States than consumers purchase.
The Trump administration has opened a trade investigation into whether vehicle imports have damaged the US auto industry. Although he is for free trade, but not at any price: "I love free trade, but it must be a smart trade, so I call him fair".
German Vice Chancellor, Sigmar Gabriel, responded to Trump's 2017 claim by telling USA automakers to "build better cars". BMW owns the Rolls-Royce and BMW brands.
There's also the fact that a number of German automakers already have huge manufacturing presences in the US.
If the European Union imposes countermeasures, it must expect Trump to come up with further measures, he told Deutschlandfunk radio. German carmakers control 90 percent of the United States premium auto market.
German automakers assembled 804,000 cars in US plants previous year but exported another 657,000 to North America from Germany, according to the VDA industry association.
German authorities have criticized the investigation into vehicle imports, which could lead to tariffs of up to 25 percent on the same "national security" grounds that Washington used to impose metals duties in March.
But late on Wednesday, talks to avoid a transatlantic trade war showed no sign of a breakthrough.
Audi and Porsche are seen to be particularly vulnerable because they do not have USA factories, while Mercedes-Benz and BMW have large established plants which could more easily allow them to expand local production capacity if imports were curtailed.