Trump has already imposed tariffs on steel and aluminum after a Commerce Department investigation determined that current imports of both metals were large enough to threaten the long-term viability of both domestic industries, thereby putting US national security at risk.
U.S. President Donald Trump's threat to impose tariffs on auto imports drew strong criticism overseas and at home where U.S. business groups and members of his own Republican Party warned of damage to the industry and raised the prospect of a global trade war that would harm American interests.
As for Trump's comments, Easter said he would not comment on a "one off" statement by the president.
The tariff proposal was first reported by the Wall Street Journal. Any new inquiry would also rely on the so-called Section 232 of the Trade Expansion Act of 1962, a, gives the executive branch the ability to conduct investigations to "determine the effects on the national security of imports".
German carmakers exported 494,000 vehicles to the USA a year ago, the VDA said, while the Chambers of Commerce and Industry (DIHK) calculated autos and parts accounted for €28.6 billion ($33.6 billion) of Germany's €111.5 billion in exports to the US. The initiation of the trade investigation could be seen as an attempt to gain leverage in the talks with the two US neighbors.
That could lead to new USA tariffs - up to 25 percent - similar to those imposed on imported steel and aluminum in March.
Trump has railed against European auto imports and tariffs on Twitter before. Last week, the top USA trade official said the three countries were "nowhere close to a deal".
"If now the United States would unilaterally raise auto tariffs, for instance, it obviously would be against the WTO", Mr Katainen said, in reference to the World Trade Organisation, the global arbiter on trade.
Bozzella noted 12 million cars and trucks were produced in the United States previous year.
The United States exported almost 2 million vehicles worldwide worth $57 billion previous year, according to US government statistics.
The latest announcement comes as negotiations with Canada and Mexico over revamping the continent-wide North American Free Trade Agreement have stalled over auto demands.
Mexico is the top exporter of passenger vehicles and light trucks to the U.S followed by Japan, Canada, Germany and South Korea, according to the Department of Commerce.
Although a large portion of the US's most popular auto models, including those from foreign brands (such as the upcoming BMW X7), are already manufactured within its borders, many are imported from other countries. "However taxing it with trade tariffs is a threat to the economic security of millions of hardworking American families".
"China and Germany are on the path of promoting multilateralism and bolstering free trade", Merkel said in Beijing.
Daniel Ujczo, a trade lawyer with Dickinson Wright PLLC, said the tariff threat is likely meant to pressure Mexico into accepting USA demands for NAFTA changes that would shift more auto production to the US from Mexico. Trump wrote in a tweet addressed to "our great American autoworkers".
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Renault SA, exposed to the US market via its 43.4 percent stake in Nissan, fell as much as 2.1 percent. At the same time, the United States exported almost 2m vehicles worldwide, worth $57bn.