BERLIN, Apr 30 (Reuters): Germany on Monday dampened hopes that an exemption from U.S. tariffs on steel and aluminium could be extended for European Union countries, but called for trade negotiations to continue regardless of whether the levies are applied.
The United States imposed import tariffs of 25 per cent on steel and 10 per cent on aluminium in March, but it provided a temporary exemption until May 1 for the EU.
Peter Beyer, Germany's transatlantic coordinator, said an extension of the exemption would be a success. "But we should not put too much hope in that," he told the daily Rhein-Neckar Zeitung.
Neither Chancellor Angela Merkel nor French President Emmanuel Macron appeared to make significant progress convincing U.S. President Donald Trump to grant EU nations exemptions from the tariffs during meetings with him in Washington last week.
"Given the many crises and conflicts, the expectations around this visit by the chancellor were far too high," Beyer said.
Should the United States drop the exemptions for the EU, Economy Minister Peter Altmaier said European states would decide whether to implement countermeasures it has prepared.
But regardless of whether or not there is an exemption, Altmaier said the Europeans should talk to the United States about trying to reach an agreement to lower tariffs across a broader spectrum of products, especially in manufacturing.
"I personally believe we should present an offer," he told Deutschlandfunk radio.
Securing broader EU support, especially from France, for such a broad package could prove challenging, however.
Altmaier saw little chance of reviving the stalled U.S.-European trade deal known as the Transatlantic Trade and Investment Partnership (TTIP). "A new edition of TTIP is not realistic now," he said.
Joachim Lang, managing director of Germany's largest industry group (BDI), urged the EU to exercise restraint with any countermeasures. "I would urge prudence," he told broadcaster ARD.
Frank Sportolari, the new president of AmCham Germany, believed a solution to the tariff dispute could still he reached. "We are cautiously optimistic that a reasonable solution can still be found in the dispute about punitive tariffs," he told the Handelsblatt business daily.
"In the end, President Trump won't do anything unreasonable," he said, noting his particular negotiating style.
"He piles in with announcements of draconian measures. But in the end, there is often a solution both sides can live with."
Meanwhile, German monthly retail sales unexpectedly fell in March, data showed on Monday, marking a fourth consecutive drop and dampening recent cheer around a consumer-led upswing in Europe's biggest economy.
The volatile indicator, which is often subject to revision, showed retail sales decreased by 0.6 per cent on the month in real terms, the Federal Statistics Office said.
That confounded the Reuters consensus forecast for a 0.8 per cent rise and followed an upwardly revised drop of 0.2 per cent in February.
"The weather was likely still bad for shopping in March, but the weakness is nevertheless puzzling," said Greg Fuzesi at JP Morgan.
"Looking ahead, things should pick up significantly in April/May, when many of the recently negotiated pay increases kick in and when the recent surprise weakness could finally unwind," he added.
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