The German Association of the Automotive Industry (VDA) has said that that any decision to declare European car and car-part imports a threat to US national security would be incomprehensible.
German car companies employ over 113,000 people at around 300 factories in the US, and are the largest automobile exporters in the country, it claimed, adding that "all this strengthens the United States and cannot be seen as a security problem."
In May 2018, President Donald Trump ordered the US Commerce Department to conduct a probe to ascertain whether US national security was threatened by car imports.
Cars at Emden port
Audi cars at a port in Emden, Northern Germany. Source: Picture-Alliance/DPA/J. Sarbach.
If the department concludes that some or all car and car-part imports do harm national security, the president will then have 90 days to consider whether to impose tariffs of up to 25%.
On Sunday, German newspaper Handelsblatt reported that officials in the country were of the strong belief that the department had told the White House that auto imports from Europe were indeed a threat.
President Trump has yet to make a decision however, and there is strong resistance among some US officials to any plans to introduce tariffs.
It has been claimed that those who are in favour of tariffs intend to use them as a form of leverage in talks with the EU and other trading partners, like Japan. President Trump was quoted last Friday as saying; "I love tariffs, but I also love them to negotiate."
Various experts have said that a 25% tariff would damage US interests, have a negative impact on consumers and devastate the US car industry, which relies heavily on foreign car parts.
The Michigan-based Center for Automotive Research said that the worst-case prediction estimated that a tariff such as this would lead to job losses in the car industry of 370,000 and a drop in car sales of up to 1.3 million annually.
Carmakers claimed last year that such a move would push up car prices to a combined total of $83 million (€73 billion) a year.
It is expected that if President Trump decides to impose tariffs on their car companies, the EU and Japan would retaliate with counter-tariffs.
During a speech to the Munich Security Conference on Saturday, German Chancellor Angela Merkel said the fact that the US was even considering whether car imports from Europe posed a national security threat was "frightening".
President Trump has often said he wanted to reduce the US trade deficit with other nations and bring manufacturing jobs back to the US. He has imposed tariffs on steel, aluminium, solar panels and hundreds of other goods imported from China.
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