German car industry warns of US tariff threat to jobs, investment

The German car industry is hoping that talks between the European Union and the United States will ease trade tensions between the EU and Washington, while warning of the threat posed by fresh tariffs to jobs and investment.

"The goal must be to reduce each other's tariffs and trade barriers, rather than creating new ones," the auto industry association VDA said on Tuesday after US President Donald Trump threatened to impose tariffs on European car imports.

A tit-for-tat trade war would have a "negative effect on employment and investment on both sides of the Atlantic," the VDA said in a statement.

In seeking to head off the threat of fresh tariffs, the VDA also highlighted the importance to the US of German carmakers' operations such as BMW, Mercedes Benz and Volkswagen.

German carmakers produce more than 800,000 vehicles a year and employ 118,000 people in the US, said the association, which argued that open markets are crucial for the auto group's operations in the US.

"That's why we hope for a convergence of views between the EU and the US," the VDA said.

EU Commission President Jean-Claude Juncker and EU Trade Commissioner Cecilia Malmstrom are set to travel to the US on Wednesday for talks with top US officials.