May 24, 2018 / 8:50 AM / a month ago

U.S. auto import probe borders on 'provocation': Germany's DIHK

BERLIN (Reuters) - A U.S. decision to launch a national security investigation into car imports marks a further low point in business ties with Europe and will hit both manufacturers and consumers, Germany’s DIHK Chambers of Industries and Commerce said on Thursday.

U.S. President Donald Trump’s administration has launched a national security investigation into car and truck imports that could lead to new U.S. tariffs similar to those imposed on imported steel and aluminum in March.

“To cite aspects of national security as justification is totally constructed and far-fetched. We almost have to take this as a provocation,” DIHK President Eric Schweitzer said.

The United States is the second-biggest export destination for German auto manufacturers after China, and vehicles and car parts are Germany’s biggest source of export income.

Schweitzer said the U.S. administration was totally ignoring the fact that German companies were investing heavily in the United States and also creating many manufacturing jobs there.

Higher U.S. tariffs on car imports would mean additional costs of more than 6 billion euros per year, Schweitzer said, warning that this would not only hit German manufacturers, but U.S. consumers as well who would face higher car prices.

“I gain more and more the impression that the United States no longer believes in competition for ideas and customers, but only in the right of the supposedly stronger,” Schweitzer said.

“It fills me with great concern that the U.S. is moving away from a free and fair world trade order,” he added.

The U.S. announcement came as data showed on Thursday that weaker exports held back German economic growth in the first quarter. The quarterly expansion rate halved to 0.3 percent from 0.6 percent in the previous quarter.

Reporting by Michael Nienaber; Editing by Paul Carrel and Gareth Jones

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