Munich, Germany – German automakers are willing to abandon car tariffs between the EU and the US in exchange for the withdrawal of a 25% border tax threat on European auto imports, according to the Wall Street Journal.
Richard Grenell, US ambassador to Germany, was expected to meet with Trump's administration on Wednesday, the paper said.
Citing sources, the Wall Street Journal said German automakers support the EU's 10% tax on auto imports from the US and a 2.5% duty on auto imports going away if Trump backs off the threat of imposing a 25% border tax on auto imports coming from Europe.
Grenell reportedly has met with executives from German automakers including Daimler AG, BMW AG and Volkswagen AG
The three companies have plants in the US and employ thousands of US workers here.
The Europeans also want to axe a 25% tax on imports of pickups, crossovers, SUVs and big vans, according to the report.
Daimler confirmed to the Wall Street Journal the meeting with Grenell, but declined to comment any further. Volkswagen did not immediately comment to the paper, while BMW said it supports free trade with "minimal or no barriers."
Trump in his presidential campaign and during his presidency has voiced support of US-made vehicles and US auto jobs.
New 25% US tariffs on imported steel and 10% tariffs on imported aluminium recently went into effect, impacting the EU as well as Canada and Mexico.
The European Union, meanwhile, will begin charging import duties of 25% on a range of US products on Friday, in response to US tariffs imposed on EU steel and aluminium early this month, the European Commission said on Wednesday.
The move confirms a tit-for-tat dispute that could escalate into a full trade war, particularly if Trump carries out his threat to penalise European cars.
The Commission formally adopted a law putting in place the duties on €2.8 billion worth of US goods, including steel and aluminium products, farm produce such as sweetcorn and peanuts, bourbon, jeans and motor-bikes.
Reuters contributed to this report.