German daily Handelsblatt reported Ambassador Richard Grenell told executives from Daimler, Volkswagen and BMW on Wednesday that Trump would suspend tariff threats if the E.U. annulled duties on U.S. cars imported into the bloc.
Trump threatened last month to impose a 20-percent import tariff on all E.U.-assembled vehicles, which could upend the industry's current business model for selling cars in the United States.
German automotive trade body VDA said on Thursday it had repeatedly called for free and fair trade in talks with Ambassador Grenell.
"But it is clear that the negotiations are exclusively being held at a political level," it said in a statement.
It said suggestions about mutually removing tariffs and other trade barriers were positive signals.
Trump's protectionist trade policies, which also target Chinese imports, have raised fears of a full-blown and protracted trade war that threatens to damage the world economy.
Reporting by Markus Wacket.