Donald Trump's trade threats alarm German carmakers, hit investor morale

German car companies urged policymakers on Monday to avoid a trade war with the United States "at all costs" after U. S. President Donald Trump threatened to tax car imports from the European Union.

The United States is the second-biggest export destination for German auto manufacturers after China, while vehicles and car parts are Germany's biggest source of export income.

"Punitive duties can't be the answer," Bernhard Mattes, president of Germany's VDA automotive industry association, said in a statement.

"A trade war between the USA and Europe must be avoided at all costs. In such a trade war there are only losers on all sides."