Angela Merkel has sent Donald Trump a trade ultimatum
The German Chancellor, one of the most powerful figures within the EU, has had a frosty relationship with the US president since he won the US election in November 2016.
Mr Trump has frequently accused Germany of treating the US “badly” and called for a shake-up in trade relations between the two states, which has received a cool response from Mrs Merkel.
And today the Chancellor sent a warning to Washington, saying the EU would discuss trade with the Washington but only on EU own terms.
She said talks regarding reducing trade tariffs for America would only take place if the EU was permanently excluded from US metal import tariffs.
The EU is currently temporarily excluded from US metal tariffs but Mr Trump has warned he would not shy away from an all-out trade war.
He previously tweeted: “When a country (USA) is losing many billions of dollars on trade with virtually every country it does business with, trade wars are good, and easy to win.
“Example, when we are down $100 billion with a certain country and they get cute, don’t trade anymore-we win big. It’s easy!”
Today Mrs Merkel warned she wanted full exemption for the EU.
She said: “We want a permanent exemption and then we are ready to talk how we can reciprocally reduce the barriers to trade.”
However, US trade experts believe this will not be enough to win Mr Trump over.
Larry Hatheway of GAM Investments told CNBC: “I think the key word in her statement was ‘reciprocal’ and the Americans are looking for something unilateral.
Angela Merkel and Donald Trump have rarely seen eye to eye – especially over trade
“They want the Europeans to cut some tariffs to open up some opportunities in exchange for this permanent exemption.
“But she used the word ‘reciprocal,’ in other words, ‘we’ll lower our tariffs if you lower yours’.
“Well, that’s not really offering the Trump administration very much. Yes, it’s a friendlier tone perhaps than the Japanese are adopting at the moment but nevertheless it’s probably not good enough.”