The U.S. ambassador to Germany returns to Washington today with a tariff peace offering.
Richard Grenell will present a proposal from Germany's leading automakers, calling for doing away with all import tariffs for cars between the European Union and the U.S.
That would mean scrapping the EU's 10% tax on auto imports from the U.S. and other countries and the 2.5% duty on auto imports in the U.S., according to Dow Jones.
In return, the Europeans want President Trump's threat of imposing a 25% border tax on European auto imports off the table.
Grenell held meetings with the CEOs of Daimler, BMW and Volkswagen, which operate plants in the U.S.
Overall, Germany's auto makers and suppliers provide 116,500 jobs in the U.S., according to the Association of German Automotive Manufacturers.
The Europeans reportedly also want a 25% U.S. tax on imports of light trucks--pickup trucks, sport-utility vehicles, and big vans--scrapped.
That could alienate U.S. auto workers, a core constituency for Trump in the midterms this fall.
Berlin has no power to hammer out trade deals--a prerogative of the European Commission.
The EU's executive body would have to persuade fellow EU member states to back a radical free-trade approach many have shown little interest in, said Dow Jones.
Trump's threats to raise tariffs on imported cars could put $54 billion in annual revenue from European passenger car exports to the U.S. at risk, according to data from the European statistics office.
Daimler and BMW each generated around 10% of their global unit sales in the first five months of the year through exports to the U.S., according to Wall Street Journal calculations.