German Chancellor Angela Merkel. File Picture: REUTERS
German Chancellor Angela Merkel. File Picture: REUTERS

Berlin — German Chancellor Angela Merkel blasted US import duties on steel and aluminium imports on Thursday as "illegal" and said they risked sparking a disastrous "spiral" of retaliatory measures.

"The German government rejects the tariffs imposed by the US on steel and aluminium. We consider this unilateral measure to be illegal; the cited grounds of national security do not stand up," Merkel’s spokesperson Steffen Seibert said in a statement. "The measure risks touching off spirals of escalation that, in the end, hurt everyone."

Merkel said the EU had made the "necessary preparations for appropriate counter-measures" to the tariffs, after EU chief Jean-Claude Juncker announced steps to hit back "within hours". But Seibert stressed that Berlin remained ready to talk to head off a trade war.

"The situation remains: the German government will continue to fight for free trade and open markets," he said. "We will continue to take a multi-lateral approach."

German foreign minister Heiko Maas pledged a united European front against protectionist measures. "Our answer to ‘America First’ can only be ‘Europe United’," he said in a statement. "Trade wars don’t have any winners."

Maas said Berlin "cannot understand and rejects" the US decision announced by US commerce secretary Wilbur Ross to target the EU as well as Canada and Mexico from midnight. "We have repeatedly made clear to the Americans that we have no interest in an escalation in trade relations between the EU and the US," he said, expressing regret that feverish talks in recent weeks had proved fruitless.

Germany, the EU’s top economy, is particularly vulnerable to the tariffs due to its heavy reliance on the automotive industry.

The German chambers of commerce and industry (DIHK), which has calculated that vehicles and car parts accounted for more than a quarter of Germany’s €111.5bn in exports to the US last year, said the US move "should almost be seen as a provocation".

German vehicle makers exported nearly half a million vehicles to the US in 2017, but they also built more than 800,000 cars at American factories where they employ some 36,500 people — and car parts producers about 80,000 more.

In the first statement from the German industry, luxury vehicle maker BMW warned of a destructive impact from the tariffs, saying, "Barrier-free access to markets is therefore a key factor not only for our business model, but also for growth, welfare and employment throughout the global economy."