BMW calls for lower EU tariffs on cars from US

German carmaker BMW called Tuesday for the European Union to lower tariffs on vehicles imported from the United States, as President Donald Trump threatens to hit the bloc with new duties.

The manufacturer said CEO Oliver Zipse is set to put the proposal forward at a meeting of Europe's biggest carmakers with EU officials in Brussels on Thursday.

The gathering is the first under a new initiative from EU chief Ursula von der Leyen where the two sides will seek to chart a way forward for the bloc's struggling auto industry.

Zipse told an economic forum in Berlin organized by newspaper Welt that "tariffs... hinder free trade, slow down innovation and set a negative spiral in motion".

"That is why we should be discussing fewer rather than more trade barriers," he said.

Zipse called for the 27-member European Union to "take a first major step" by lowering duties on vehicles imported from the United States.

Currently, the EU imposes duties of 10 percent on vehicles from the United States, while the figure was only 2.5 percent for vehicles being sent from Europe to the United States, Zipse said.

"Let's create a level playing field: a customs rate of 2.5 percent on both sides," he said.

His comments come as Trump is threatening to hit goods from the EU, which runs a large trade surplus with the United States, with hefty tariffs.

Such a move would deal a blow to German auto titans like Volkswagen and Mercedes-Benz, as well as BMW.

The sector is already struggling due to fierce competition in key market China, a sluggish transition to electric vehicles and weak demand.

BMW saw its profits suffer last year due to falling Chinese demand.

Carmakers also complain that new EU CO2 emissions targets are proving harder to hit than expected due to weak demand for EVs.