TRUMP’S TRADE WAR EXPOSES GERMAN CARMAKERS TO A ‘FULL-ON STORM:’

The German chancellor’s visit to Chequers, in Buckinghamshire, the Prime Minister’s countryside retreat, was supposed to demonstrate thawing relations between Britain and the Continent ahead of a key European summit.

Instead, the pair’s carefully choreographed diplomacy was being drowned out by a cacophony of threats emanating from Washington.

Hours earlier, Donald Trump had stunned allies by announcing US tariffs on all goods imported from neighbours Canada and Mexico – and threatened to do the same to the European Union “soon”.

While tariffs on Mexico and Canada have since been delayed by a month after last-minute concessions, the threat remains.

For Scholz, the moves risk creating another almighty headache for Germany’s flatlining economy – and in particular the country’s prized carmaking industry.

American tariffs on EU exports threaten to clobber German automotive champions such as Volkswagen, BMW and Audi, at a time when they are already battling cut-throat competition from China and tough EU emissions rules.

“This isn’t a headwind for German carmaking, it’s a full-on storm,” says Sander Tordoir, the chief economist at the Centre for European Reform think tank.

Nick Parker, an automotive expert at AlixPartners, agrees, warning: “I think this does become an existential threat.”

Germany’s automotive industry will be the biggest loser by far if Europe is dragged into a trade war, according to modelling by Oxford Economics.

Should the US and the EU hit each other with 25pc tariffs, the consultancy estimates that German car exports to the US will drop by 7pc.

But that’s good, right? German greens have been pushing for “deindustrialization” for years, a sort of self-inflicted Morgenthau Plan. Trump appears to be eager to help them finish the job.