Germany's economy minister says her country may sue the United States before the World Trade Organization if President Donald Trump goes ahead with a planned 'border tax' on imported goods.
Brigitte Zypries says World Trade Organization rules limit the level of import taxes member states can levy.
Zypries told public broadcaster Deutschlandfunk in an interview Friday that one response would be for all countries to impose such import taxes, but that this would take a long time.
She told the station that "the other option is we sue (Trump) at the WTO," adding that "it wouldn't be the first time that Mr. Trump has lost in the courts."
The minister's combative stance comes ahead of Merkel's first meeting with Trump in Washington and a gathering of G20 finance ministers in Baden-Baden, western Germany, set to be dominated by the U.S. president's "America First" policy.
Trump has targeted the German luxury carmaker BMW by name with threats of a 35 percent border levy if it goes ahead with construction of a plant in Mexico.
If a U.S. border tax was found to breach World Trade Organization rules, "it wouldn't be the first time that Mr Trump has failed before the courts," Zypries said, in a jab at repeated rejections by U.S. judges of executive orders banning immigration from majority-Muslim countries.
In 2016, the United States was Germany's biggest export customer, importing 107 billion euros of goods while selling back just 58 billion euros' worth.
Trump's pledge to bring manufacturing jobs back to American shores has led the president and his advisors to attack major exporting nations like Germany and China, accusing them of manipulating their currencies to make their goods less expensive.
But Germany says that its products are simply better and that the U.S. should focus on producing more competitive manufacturers.
When Trump complained that he saw more Mercedes in New York than Chryslers in Germany, Vice-Chancellor Sigmar Gabriel retorted that "the U.S. will have to build better cars."
Zypries acknowledged that Germany's trade surplus was a "problem" but said that Berlin was acting to reduce it -- and that for now, "the Americans need our machines and industrial plants."
Alongside cars, capital goods like machine tools are one of Germany's biggest manufacturing sectors.
Zypries predicted that Trump's advisors would warn him that "the Americans would be cutting off their nose to spite their face if they slap such taxes on imports."
Amid the heightened rhetoric, she acknowledged that "a lot is at stake" as Merkel meets Trump on Friday, calling for clarity and "creating a reliable base" for relations to reduce the "poisonous" uncertainty clouding the economic outlook.