COLOGNE, Germany — German officials are scrambling to make sense of the latest twist in the brewing war over U.S. steel and aluminum tariffs, which could see Washington dole out exemptions based on allies’ defense-spending levels.

The idea of coupling the two issues first came up last week, when U.S. Treasury Secretary Steve Mnuchin told CNBC that President Donald Trump would factor military contributions to NATO into the application of a 25 percent tax on imported steel and 10 percent on aluminum.

European officials have largely rejected the move as a serious threat to transatlantic relations.

European Budget and Human Resources Commissioner Günther Oettinger argued in a Sunday interview with Germany’s ARD television station that the talks to resolve the dispute should exclude defense spending.

“This should be only about trade. Defense, NATO or other topics should not get mixed up,” he said.