German Chancellor Angela Merkel warned US President Donald Trump against unleashing an all-out trade war after he threatened to impose steep tariffs on cars from the European Union.
In a speech to the Bundestag federal parliament, Merkel said both sides were effectively locked in a "trade conflict" since Trump's decision to slap punitive tariffs on steel and aluminium imports.
"It is worthwhile to prevent this conflict from becoming a real war," Merkel said, adding however that this "would require both sides" to take steps.
Taking aim at Trump over his complaint that the EU, and in particular economic powerhouse Germany, is running a massive trade surplus against the US, Merkel said that his calculation is skewed as it is based only on goods, not services.
"If you include services like the digital services, then you have a completely different trade balance sheet, with the US showing a surplus against the EU," AFP cited her as saying.
"It is almost old-fashioned to only calculate goods and not include services," the chancellor said.
