Merkel’s Bid to Halt Trump Tariffs Falters as Trade War Looms

(Bloomberg) — German Chancellor Angela Merkel failed to win a public commitment from President Donald Trump to halt U.S. tariffs on imported steel and aluminum from Europe, leaving the two economic powers teetering on the brink of a trade war.

With a U.S. tariff exemption for the European Union expiring on May 1, Merkel said she discussed trade disputes with Trump during talks at the White House on Friday, including her offer of broader trade negotiations with the EU. She suggested the president wasn’t convinced.

“The president will decide, that’s clear,” Merkel told reporters at a news conference alongside Trump. “We spoke about the state of negotiations and our respective assessments. The decision lies with the president.”

Trump didn’t tip his hand, saying “we’re working on” making trade more fair and “more reciprocal.” He blamed his predecessors for trade imbalances: “I don’t blame the chancellor, I don’t blame Germany, I don’t even blame the EU,” Trump said.

That leaves open the possibility of a major trade conflict after Merkel and French President Emmanuel Macron made back-to-back trips to Washington this week to try to sway Trump to extend the waiver past May 1. Germany is the world’s fifth-biggest steel exporter and the largest in the EU, according to U.S. Department of Commerce data.

Chevrolets in Berlin

Trump has repeatedly criticized Germany and other EU nations over trade policies, saying that those allies treat the U.S. worse than enemies do. The White House has pushed ahead with punitive trade measures that target the EU and other countries.

“Germany sends us cars. We send them cars; they practically don’t take them,” Trump said in February. “I mean, how many Chevrolets do you see in the middle of Berlin? Not too many, folks.”

Earlier this month, Trump gave the EU and other allies a temporary reprieve from global tariffs he imposed on imported steel and aluminum.

Merkel and Macron met before their visits to Washington to craft a strategy for confronting Trump. During a speech to Congress on Wednesday, Macron warned that a “commercial war” would “destroy jobs.”

Macron was optimistic Wednesday that tariffs on steel and aluminum can be averted. The French leader said he believes that in the end Trump will agree to exempt the EU, though he received no assurances to that end.

“That’s my bet,” he said. “A trade war between allies doesn’t make sense.”

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