President Donald Trump owns a Mercedes SLR McLaren and a Mercedes Maybach.

His daughter Ivanka drives a Mercedes Cabrio.

This has not stopped him seizing on German cars as the ultimate symbol of mercantilist villainy and unfair trade practices.

Trump reportedly told French leader Emmanuel Macron that he aims to clear every German car from Fifth Avenue in New York in an unyielding quest for national purification.

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The German car industry is now seriously alarmed after the bad-tempered collapse of the G7 summit in Canada, followed by a storm of anti-German tweets from Air Force One.

It is calling for the total abolition of EU import tariffs on cars in a frantic bid to avert a transatlantic trade war and preserve its lucrative US market.

But the bitter rift between Europe and America already risks spinning out of control.

"I am very worried," said Bernhard Mattes, president of the country's auto federation (VDA), speaking to the Süddeutsche Zeitung.

"Let's get rid of the tariffs and rely on mutual standards on both sides of the Atlantic."

The plea came as chancellor Angela Merkel described the G7 summit clash as "sobering" and warned that the EU will retaliate in kind whenever provoked.

"We're not going to let ourselves be rolled over the table a second time," she said. "We will also take action."

German industrialists increasingly suspect that Trump is spoiling for a fight and intends to go ahead with 25 per cent tariffs on European car imports, exploiting a national security loophole under US trade law as he did over duties on steel and aluminium.

The EU currently imposes 10 per cent duties on cars, mostly aimed at curbing a flood of imports from Asia.

This could turn into a double drama for Germany if Brexit talks break down at the same time, leading to trade barriers with Britain.

The German car industry might then face a sudden squeeze in its two biggest global markets.

Professor Gabriel Felbermayr, from the IFO Institute in Munich, said a double shock from both Trumpian tariffs and a no-deal Brexit would cost the German car industry around €10 billion ($16.7b), but the negative synergy of the two together would be worse than the sum of the parts.

"There is less leeway for trade diversion," he said. "Industry would be badly hurt, and nobody wants this kind of escalation."

Brussels has threatened tit-for-tat retaliation against Washington. German carmakers fear this will goad Trump to escalate further.

He appears to relish the prospect of a full-blown showdown before the midterm US elections in November.

EU counter-measures risk a spiral of protectionism, with painful outcomes for those countries such as Germany that are highly-geared to trade.

Exports equal 46 per cent of GDP in Germany, but only 12 per cent in the US.

"Further punitive tariffs on cars from Trump would do massive damage to the German economy," said Hans Gersbach, from the German economy ministry.

Roughly 850,000 jobs in Germany depend on the car industry. An eighth of all jobs are linked to the sector in one way or another.

The difficulty is that Brussels cannot wave tariffs on US cars alone even if it wants to.

The EU has to extend the same zero rates to China, India, and emerging Asia, to be compliant with World Trade Organisation rules.

"You can't just cut the tariffs for US cars," said Eurointelligence. "You are not allowed to discriminate. The EU now has carefully crafted trade agreements with South Korea and Japan, where the lifting of car tariffs has been agreed to be gradual."

France, Italy, and Spain compete for the mid-level segment of the car market, and are sensitive to price.

They would demand exorbitant political concessions from Germany - perhaps on eurozone fiscal union - in exchange for helping Mercedes, Audi, Porsche and Volkswagen.

Audi is the worst hit by the threatened tariffs since it does not manufacture models in America. VW has four plants in Mexico, which might be vulnerable.

Professor Felbermayr said the German government is looking at a possible "TTIP-lite" trade deal with the US to eliminate bilateral tariffs.Ironically, this resembles the deal that Theresa May wants on Brexit, but which the EU so far refuses to contemplate without stringent conditions.

On one level, the US sanctions are absurd since German car firms employ 36,000 workers in the US, and over half their output from US plants is exported.

The tariff issue is essentially a red herring since average US rates and EU rates are identical at 1.6 per cent.

The dispute is really a cover for something else. The White House complaint against Germany and China is that they have strategically gamed the global trade system, although in different ways.

Peter Navarro, the ultra-hawkish White House trade adviser, argues that Germany has locked in a semi-permanent trade advantage through the deformed structure of the euro, allowing it to amass and hold a current account surplus of over 8 per cent of GDP.

The implicit Deutsche mark is "grossly undervalued", he argues. The intra-EMU exchange rate is misaligned.

To the extent that there is a self-correcting mechanism, it is through "austerity" policies in the South.

This means that the eurozone has become a contractionary black hole, hollowing out world demand.

It distorts the global economy. Germany has not shown any willingness to correct this. Berlin deems the eurozone surplus to be a virtue.

The US conflict with China is different since the Chinese trade surplus has largely disappeared. It is a contest for control over the technologies of the 21st century.

Seen it this light, the US assault on the world's existing trade system becomes less of a mystery. It is not a discussion about tariffs or Ricardian theories of comparative advantage. It is about geopolitics. This is much more threatening for Germany.