German carmakers wants the EU to scrap its 10 percent tax on imported US-made cars, the Wall Street Journal reported.
According to the newspaper, during their recent meetings with the US Ambassador to Germany, Richard Grenell, top executives of leading German automakers BMW, Volkswagen and Daimler Benz pitched the idea of scrapping mutual car import levies as part of a broader agreement on a wide range of industrial goods.
This presents a problem for the Trump Administration, however, because lifting the Lyndon Johnson-era levy could alienate US auto workers who form a significant part of Donald Trump’s support base at home.
The European Commission earlier threatened to impose a 25 percent tax on $3.2 billion worth of US goods, after President Trump announced a 25 percent tariff on imported steel from the EU and a 10 percent tax on aluminum imports from the bloc.
READ MORE: Germany Warns Against EU-US Trade War, as 'Transatlantic Relations Are at Stake'
Tensions between the US and its key trade partners in the world have been increasing fears of an all-out trade war.
Financial markets have been feeling the pinch of this growing uncertainty with the Dow Jones industrial average on Tuesday posting its longest losing streak in more than a year, the newspaper reported.