German Chancellor Angela Merkel on Friday said that Europe would apply counter-measures if the US imposed tariffs on European cars.
Speaking at a press conference, the Chancellor said that in the EU's eyes, putting tariffs on vehicles produced in Europe would flout World Trade Organization rules.
Merkel warned that the imposition of such tariffs by the US constituted a "real threat to the prosperity of many in the world", Efe news reported.
She said the European Commission was working to come up with a series of counter-measures if the US decides to introduce tariffs on Europe-made cars.
But applying reciprocal measures would be "the worst solution", according to Merkel, as it could descend into a trade war.
The US and EU should enter into dialogue in a bid to resolve their differences on the matter, said Merkel, pointing out that Commission President Jean-Claude Juncker was travelling to Washington next week with proposals to that end.
She defended multilateralism, using the financial crisis of 2008 as an example of when cooperation between countries had prevailed.
--IANS
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