Germany, U.S. Seek Duty-Free Auto Trade Deal

German Chancellor Friedrich Merz and Mercedes-Benz CEO Ola Källenius have proposed a reciprocal tariff waiver system to ease escalating trade tensions between the U.S. and the European Union, particularly in the automotive sector. The plan involves allowing duty-free imports of U.S. cars into Europe in exchange for similar tariff waivers on European vehicles entering the U.S., aiming to balance the trade disparity and neutralize the impact of tariffs imposed by President Donald Trump. Merz, following discussions with President Trump during his first Washington visit, announced that representatives from the White House and the German chancellery will engage in intensive talks, while trade negotiations remain under EU jurisdiction. Källenius highlighted that this mechanism could set a precedent for other industries and emphasized Mercedes-Benz's active engagement with policymakers in the U.S., EU, and China to present strategic solutions. The proposal comes amid significant concerns about the 25% U.S. tariffs on imported vehicles, prompting automakers like Mercedes-Benz to consider production shifts, such as relocating manufacturing to Alabama. The outcome of these negotiations could have broad implications for global trade and potentially foster cooperation between the U.S. and EU across multiple sectors.