Angela Merkel

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Is German Chancellor Angela Merkel preparing to hit back against US tariffs with action against America's car industry?

There were heavy hints on Friday that Europe's strategic interests included its own car industry. President Donald Trump had already given national security as a reason for threatening punitive tariffs on German cars.

Ms Merkel says: "We should think about the strategic significance of the auto industry for the European Union so we can prepare an exchange with the US."

Speaking at an event to mark 70 years of Germany's "social market" economic model, she said the market dominance of giant US internet platforms also posed a challenge to Europe's social model.

"The platform economy is a big problem," she said. "It challenges both our competition authorities and the EU's, and raises the question of whether they need to get involved in the matter of the big concentration of big platforms from the US."

Reuters

The US runs a large account surplus with Europe if services are included in the total, German Chancellor Angela Merkel said, adding that existing international trade accounting systems are outdated.

President Trump has often complained about large trade deficits America runs with many countries, particularly Germny, and has threatened Europe with punitive tariffs in response.

Mrs Merkel was addressing an audience of business people in Berlin days after disputes over trade led to the annual G7 summit ending in disarray.