GERMAN CHANCELLOR  Angela Merkel on Wednesday 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.

Both sides were already locked in a "trade conflict" since Trump's decision to slap punitive tariffs on  steel and aluminum imports, said Merkel, adding that ''it is worthwhile to prevent the conflict from becoming a real war.''

Trump on Sunday charged that Europe is ''possibly as bad as China'' on trade, as he reiterated that he is mulling import taxes of 20 percent on EU cars.

The EU has slapped tariffs on iconic US products including bourbon, jeans and Harley Davidson motorcycles, as a symbolic  tit-for-tat  response to the metals duties.

Taking aim at  Trump  over his complaints that the EU, and in particular 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,'' she said. [Agencies].


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