BERLIN: German Chancellor Angela Merkel on Wednesday warned US President Donald Trump against unleashing an all-out trade war after he threatened to impose steep tariffs on cars from the European Union.
In a speech to the Bundestag federal parliament, Merkel said both sides were effectively locked in a “trade conflict” since Trump’s decision to slap punitive tariffs on steel and aluminum imports.
“It is worthwhile to prevent this conflict from becoming a real war,” she said, adding however that this “would require both sides” to take steps.
Trump on Sunday charged that Europe is “possibly as bad as China” on trade, as he reiterated that he is mulling import taxes of 20 percent on EU cars.
The EU has slapped tariffs on iconic US products including bourbon, jeans and Harley-Davidson motorcycles, as a symbolic tit-for-tat response to the metals duties.
Taking aim at Trump over his complaint that the EU, and in particular economic powerhouse Germany, is running a massive trade surplus against the US, Merkel said that his calculation is skewed as it is based only on goods, not services.
“If you include services like the digital services, then you have a completely different trade balance sheet, with the US showing a surplus against the EU,” she noted.
“It is almost old-fashioned to only calculate goods and not include services,” Merkel said.
Merkel has previously voiced backing for a “digital tax” that would target multinationals like Amazon, Facebook or Google, which have come under fire for shifting earnings around Europe in order to pay lower taxes.
But the EU is divided over the proposal, as countries including Luxembourg and Ireland are loath to see US tech giants head for the exit.
With the US-EU trade row showing few signs of easing, European Commission President Jean-Claude Juncker is heading to Washington by the end of July to seek a way out of the conflict.
Relations between the US and other industrialized powers have turned increasingly tense as Trump has pushed his “America First” stance with punishing consequences for trading partners, regardless of whether they are allies or adversaries.
Historically strong ties between Berlin and Washington have also taken a beating since the US leader repeatedly skewered Germany over its record trade surplus as well as its relatively small defense spending.
Merkel acknowledged that Berlin has not been investing enough on defense, but stressed that it will push outlays to 1.5 percent of gross domestic product by 2025.
Nevertheless, Berlin’s planned spending is still short of the NATO goal of 2 percent that Trump insists on.
And despite its 1.5 percent pledge, its latest budget forecast for the coming years shows the proportion actually falling to 1.23 percent in 2022 from 1.24 percent this year — something that could emerge as a point of contention when NATO leaders gather in Brussels next Wednesday and Thursday (July 11-12).
Merkel stressed however that “Germany is a reliable partner in NATO.”
“We are the second biggest provider of troops, we are participating in several missions and Germany will remain a reliable partner of NATO,” she said.
Merkel said “wars are raging on our front door,” listing the Syrian war, Daesh group militancy, unrest in Afghanistan and the conflict in Ukraine.
“To not be prepared for defense of the alliance would be negligent,” she said.
Merkel warns Trump against trade war over car tariffs threat
Merkel warns Trump against trade war over car tariffs threat
Supplier hub to anchor Saudi car industry, says TASARU CEO
RIYADH: Saudi Arabia’s Public Investment Fund is stepping up efforts to localize automotive manufacturing, with its portfolio company TASARU announcing partnerships with five Tier-1 global suppliers to localize advanced component manufacturing in the Kingdom.
The agreements were announced at the fourth PIF Private Sector Forum in Riyadh. TASARU also revealed plans to establish a new Supplier Hub in the King Salman Automotive Cluster in King Abdullah Economic City, designed to support next-generation vehicle development and strengthen the national automotive ecosystem in alignment with Vision 2030.
Speaking to Arab News on the sidelines of the forum, Michael Mueller, CEO of TASARU, said: “You cannot build cars without having the right partners from the supplier side, and with that, together with the OEMs, we selected the partners that we just announced today to localize them.”
He added that the presence of large international suppliers is expected to attract smaller Tier-2 and Tier-3 manufacturers, helping the ecosystem scale.
The five partners include Shin Young for metal stamping and body structures, JVIS for exterior plastics, and BENTELER for chassis and hot-formed steel components. Guangxi Fangxin will supply interior systems, while Lear Corp. completes the group, with all expected to establish manufacturing operations in the Kingdom.
Founded more than three years ago, TASARU was established to introduce new technologies into Saudi Arabia’s mobility sector. The company has prioritized localizing smaller OEM and supplier businesses while bringing next-generation solutions into the Kingdom.
Mueller said visible progress on factory construction by Ceer, Lucid and Hyundai is shifting perceptions about the sector’s viability.
“A lot of people on the sideline watched whether automotive is really happening,” he said. “Now they recognize that the factories … are under construction, so that’s the first signal that it’s not just the bubble. It’s not just PowerPoint. It’s getting real now on the ground.”
The CEO shares that KAEC is positioned as a hub for Saudi Arabia’s automotive industry, making it a strategic location for the TASARU Supplier Hub. The facility is designed to support OEMs and next-generation vehicles, including Ceer and Lucid Motors, through a shared, just-in-time manufacturing model with integrated logistics and regulatory support.
TASARU will provide infrastructure and operational support, while partners bring technical expertise and gradually develop training centers to build a local workforce, Mueller said.
He positioned Saudi Arabia as an attractive base for global suppliers because of its access to minerals and rare earth resources, energy availability and coordination across PIF portfolio companies and government entities.
“They have access to minerals. They have access to rare earth. They can benefit from what is already existing. They have stable energy solutions. I think this footprint might benefit from the whole ecosystem as it is, not just automotive,” he said.
Companies without a Saudi footprint risk missing a “huge opportunity,” Mueller added.
He said advancing the industry will require clearer regulatory frameworks, including defined trigger points and licensing pathways that allow companies to execute their mandates.
“Of course, you need to have more or less the regulatory framework to allow autonomous cars, sooner or later, on the streets. But it's happening, and this is a huge chance also for Saudi Arabia,” Muller said.
He added: “If you are advanced in bringing such regulations onto a fast track, then you have a huge opportunity to be one of the first countries that establish this.”
With rising traffic levels in Riyadh, Mueller said emerging mobility technologies could help solve first- and last-mile transportation challenges.
“If the Metro is already full, that is good because people are using it. Now, you have to connect the dots. You have to finally make sure that people get from home to the metros and or to the bus station. So this first last-mile transportation is something where new technologies might help to bridge that,” he said.
The CEO said the project is expected to take roughly one and a half to two years for suppliers to go live. More broadly, the initiative reflects Saudi Arabia’s transition from investment attraction to full-scale industrial localization, strengthening local content, private-sector participation, and long-term industrial resilience in line with Vision 2030.
