United States President Donald Trump would agree to suspend threats to impose a 20% import tariff on all European Union-assembled cars – but only if the bloc lifts duties on US cars. The deal was reportedly tabled by the US ambassador to Germany who met with German car bosses.

German media reported that US Ambassador Richard Grenell told executives from Daimler, Volkswagen and BMW during a meeting that in exchange Trump wanted the EU to annul duties on US cars imported to the bloc.

As reported by the Reuters news agency, the meeting took place at the US embassy in Berlin on July 4. It was reported that the chief executives of Daimler, BMW and Volkswagen (Dieter Zetsche, Harald Krueger and Herbert Diess respectively) were in attendance.

A spokeswoman for the German economy ministry also declined to comment on the report, saying issues related to the trade dispute with the United States were being handled by the European Commission in Brussels on behalf of EU member states.

Current US import tariff rates on cars are 2.5% and on trucks 25%. The EU has a 10% levy on car imports from the United States.

In a separate report, Deutsche Welle (DW), Germany’s international broadcaster, noted that the German car chiefs “liked” the offer described by the US ambassador.

However, if no solution is found, analysts on both sides of the Atlantic fear the current situation could escalate into a full-blown trade war between Washington and Brussels.