United States Ambassador to Germany Richard Grenell reportedly told German auto makers Wednesday the U.S. would back off threats of tariffs on European car imports in exchange for the European Union’s elimination of duties on U.S. cars.

The German newspaper Handelsblatt reported Grenell told BMW, Daimler and Volkswagen executives of the proposal during a meeting Wednesday at the embassy in Berlin.

Daimler and Volkswagen declined to comment and BMW was not immediately available for comment, the report said.

The reported proposal comes after the European Union warned U.S. President Donald Trump last Friday the potential indirect costs of imposing tariffs on cars could amount to $294 billion.

The EU report, submitted to the U.S. Commerce Department, maintained the tariffs would disrupt cross-border supply chains in the automotive industry. The report said the tariffs could possibly trigger higher U.S. industrial costs, raise consumer prices, hurt exports and cost jobs.  

The World Trade Organization said Wednesday trade barriers being set by world economic powers could jeopardize the global economic recovery.

“This continued escalation poses a serious threat to growth and recovery in all countries, and we are beginning to see this reflected in some forward-looking indicators,” WTO Director General Roberto Azevendo said.

Azevendo did not expound on his remarks, but the WTO’s quarter trade outlook indicator in May suggested trade growth in the second quarter would decelerate.

 

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