Mubasher: The international system of trade is facing a crisis, the World Trade Organization (WTO) warned on Tuesday.

“The system is in crisis mode and how this plays out remains to be seen,” WTO deputy director general Karl Brauner said in the Handelsblatt automotive summit in Wolfsburg, Germany.

Unilateral actions, which deviate from common rules and principles, would not allow global trade and welfare, Brauner warned.

“You need legal certainty and predictability, and if everybody just does whatever they want, it’s over,” he said.

Brauner’s remarks came at the time when officials from German auto giants Daimler, BMW, and Volkswagen have been summoned in Washington to meet White House economic adviser Larry Kudlow to discuss US efforts to rebalance global trade, in a bid to avert potential tariffs on luxury vehicles imported into the US.

President Donald Trump warned German auto manufacturers last year that he could levy a 35% tariff on vehicles imported to the US, in the event of failing to “rebalance” trade.

Despite the fact that it is the European Commission that formally tackles trade negotiations on behalf of the European Union (EU), the White House demanded to meet German auto bosses who would propose plans for raising the proportion of components produced in the US.

Volkswagen would reiterate its plans to expand its manufacturing capacity to include electric cars.

German carmakers are among the biggest net exporters of automobiles to and from the US.

For instance, BMW and Mercedes make most of their sport utility vehicles (SUV) at their plants in the US, to which they export luxury limousines built in Germany.

The visit by German car bosses would make the US administration understand the impact of tariffs on global trade, Brauner said.