BERLIN -- The U.S. ambassador to Germany told German automakers that President Donald Trump could abandon threats to impose tariffs on cars imported from the European Union in exchange for concessions, an industry source said on Thursday.
German daily Handelsblatt reported Ambassador Richard Grenell told executives from Daimler, Volkswagen and BMW on Wednesday that Trump would suspend tariff threats if the EU annulled duties on U.S. cars imported into the bloc.
Trump threatened last month to impose a 20-percent import tariff on all EU-assembled vehicles, which could upend the industry's current business model for selling cars in the United States.
German automotive trade body VDA said on Thursday it had repeatedly called for free and fair trade in talks with Ambassador Grenell.
"But it is clear that the negotiations are exclusively being held at a political level," it said in a statement.
It said suggestions about mutually removing tariffs and other trade barriers were positive signals.
Trump's protectionist trade policies, which also target Chinese imports, have raised fears of a full-blown and protracted trade war that threatens to damage the world economy.
German auto industry leaders are making the case to the Trump administration that a trade feud with the U.S. will cause irreparable damage to global business.
The CEOs of The Volkswagen Group, Daimler and BMW Group met Wednesday with the U.S ambassador to Germany to discuss looming U.S. duties on light-vehicle imports from the European Union, according to people familiar with the matter.
The meeting, reported earlier by German business newspaper Handelsblatt, was aimed at forming a direct link to the administration, said the people, who asked not to be named as the talks were private.
The head of parts supplier Continental was also in attendance, one of the people said.
The automaker executives' initiative coincides with new proposals reportedly being considered by EU officials to stave off a worsening global trade war.
President Donald Trump last month proposed a 20 percent levy on imported EU autos, and has ordered a probe into whether imports of cars and car parts are a threat to U.S. 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.
The proposal being weighed by EU officials would cut tariffs between the world's largest car-exporting nations -- including the U.S., South Korea and Japan, the Financial Times reported Wednesday.
Separately, German Economy Minister Peter Altmaier is traveling to Paris next week to help coordinate a new EU initiative for talks with the U.S. on steel tariffs.
Automakers have responded en masse to the proposed U.S. tariffs on foreign cars, saying they would harm the U.S. auto industry along with players abroad.
The EU isn't allowed under global rules to reduce its 10 percent tariff on American cars unless the bloc either does so for World Trade Organization members as a whole or reaches a bilateral accord with the U.S. that covers "substantially all" two-way trade.
European trade chief Cecilia Malmstrom said last week there is "no way" EU governments would agree to scrap the bloc's car-import duty for all WTO members, leaving the option of going for a broader commercial deal with the U.S.
The EU unsuccessfully sought a permanent waiver from Trump's metals tariffs imposed in March. As part of those demands, the EU said it was willing to start negotiations with the U.S. on a relatively narrow trade deal focused on eliminating tariffs on industrial goods including cars. The offer went nowhere, according to European officials.
"This is what we offered the American administration, under the condition of course that they did not impose those steel and aluminum tariffs," Malmstrom told reporters in Brussels on June 26. "They rejected that offer."