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Germany said to be at odds with France over EU response to US tariffs

While Germany remains in favor of giving concessions to the U.S. to prevent tariffs on European steel and aluminum, France is looking to pressure China over state subsidies and overcapacity in the steel industry, Bloomberg News reported March 27, citing unidentified government officials from both countries.

U.S. President Donald Trump recently signed orders enacting tariffs of 25% on global steel imports and 10% on aluminum, pledging to boost American production and security.

Trump is inclined toward bilateral agreements with certain states, while German Chancellor Angela Merkel is pressing for a common EU approach based on World Trade Organization rules.

Germany is willing to discuss with the EU any measures to counter U.S. protectionism as it looks to protect its own export-led industry. France would prefer that no concessions are made by the bloc, which had about US$640 billion of trade with the U.S. in 2016.

The German government is investigating a possible 10% reduction in EU tariffs on automobiles to avoid a trade dispute, which the German car industry body, VDA, supports.

"We advocate sustainable and reliable agreements that are WTO-compliant," the VDA said in an emailed statement to Bloomberg. "In the interests of fair and free trade, it is necessary to dismantle each other's trade barriers and to agree a new framework."

China is seeking compensation from the U.S. for potential lost trade due to the tariffs in what could be the first step toward a formal dispute between the two countries in the World Trade Organization.