Auto industry BMW X5 German Car Companies

Published on January 16th, 2017 | by Steve Hanley

Trump Thumps German Car Companies, Threatens Tariffs

January 16th, 2017 by  
 

Donald Trump just lambasted the German car companies and threatened them with a 35% tariff if they want to sell their products in the US. He told German newspaper Bild on Monday, “If you want to build cars in the world, then I wish you all the best. You can build cars for the United States, but for every car that comes to the USA, you will pay a 35 percent tax.”

BMW X5 German Car Companies

Not content to leave that bombshell lying about, the Trumpenator went on to say, “I would tell BMW that if you are building a factory in Mexico and plan to sell cars to the USA, without a 35 percent tax, then you can forget that.”

As usual, The Donald’s bombastic remarks were nonetheless ambiguous. Was he referring to cars built in Germany or only those built in Mexico? Volkswagen, BMW, and Mercedes all have factories or are planning to build factories in Mexico. What Trump apparently fails to realize is that many of the cars produced in Mexico are sold in world markets other than the US.

He clearly also can’t comprehend that many cars built by German car companies in the US are exported to other countries. BMW builds its X3, X4, X5, and X6 SUV’s in South Carolina and exports about 65% of them to other markets.

German car companies employ about 33,000 workers in the United States and US automotive suppliers to German car companies account for 77,000 more, according to VDA, a German auto industry trade group. “In the long term, the United States would be shooting itself in the foot by imposing tariffs or other trade barriers,” VDA President Matthias Wissmann said in a statement. German car makers have quadrupled light vehicle production in the United States over the past seven years to 850,000 units. More than half of them are exported according to the VDA.

So, can Trump do anything but run his mouth? Apparently so, “The president’s powers are considerable. He can legally impose tariffs of up to 15 percent for 150 days. Trump is not constrained by Congress,” said Simon Evenett, professor of international trade at Switzerland’s University of St Gallen. “Even if foreign companies object and seek to challenge the legality of tariffs, it will take at least 18 months to get decided. Corporate strategies will be disrupted by then.”

German authorities were outraged. Germany’s deputy chancellor and minister for the economy, Sigmar Gabriel, did not mince words. As reported by The Guardian, Gabriel said “The US car industry would have a bad awakening if all the supply parts that aren’t being built in the US were to suddenly come with a 35% tariff. I believe it would make the US car industry weaker, worse and above all more expensive.”

That’s another thing Trump doesn’t understand. Pandering to unemployed white people is all well and good. After all, it won him the election. But will his supporters still be there for him when they realize they are paying more for cars built exclusively in the US? Global trade is a two way street. If Trumpeters really are worried about US jobs, why are they still shopping at Walmart? Is that not a gross inconsistency?

Trump seems to think there is something nefarious going on because Mercedes sells far more cars in the US than Chevrolet sells in Europe. Why is that, he wonders? The answer is simple, Sigmar Gabriel says. “Build better cars.” Ouch!

German chancellor Angela Merkel was embarrassed when George W. Bush gave her a shoulder massage in public years ago. That little show of affection will be nothing compared to what America’s leading sexual predator has in mind for her.

Source: Reuters via AutoBlog

 





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About the Author

I have been a car nut since the days when Rob Walker and Henry N. Manney, III graced the pages of Road & Track. Today, I use my trusty Miata for TSD rallies and occasional track days at Lime Rock and Watkins Glen. If it moves on wheels, I'm interested in it. Please follow me on Google + and Twitter.



  • Marc P

    Good luck… is all I can say.

  • Jim Smith

    “That little show of affection will be nothing compared to what America’s leading sexual predator has in mind for her.”

    Why bring Bill Clinton into this?

    • Steve Hanley

      Well, Bill’s sexual predator days are pretty much over, but Donald’s are just beginning. Wait and see how differently the prigs in Congress react when its one of their own diddling women in the Oval. The difference is likely to be quite dramatic.

      • James Rowland

        Expect lots of gaslighting.

    • eveplayer77

      LAWL !!!

  • Antony Berretti

    How tall a pedestal can Adolf sorry Donald build from which to fall, jump, be pushed off!

    • bioburner

      Push off has a nice ring to it.

  • super390

    I smell German “investments” coming to an obscure corner of the Trump Organization that will make this problem mysteriously go away. Just like Lockheed and Boeing. And of course, Trump’s original buyers in Russia.

    The White House will be the one place in America where free trade will actually be happening, one shakedown at a time. The joke is, there’s nothing and no one to stop Trump from doing this.

    • Steve Hanley

      Great comment!

    • Jim Smith

      Where is this “free” trade you speak of? It sure is not in the USA, or anywhere in the world.

  • Jim Smith

    Germany puts 10% tariffs on all imported cars? 35% is too steep. Rather than let the Germans import cars to the US at 2.5%, up it to 10%. If the Germans do not like it, they can lower their import tariffs and we can match them.

    • Steve Hanley

      Fair’s fair. Most are too young to remember the bruising trade wars that preceeded NAFTA and all the other global treaties. Sometimes, the past is not as glorious as we think it was.

      • Jim Smith

        I would prefer real fair trade, but no country on the planet is anywhere remotely ready for that. If a country puts tariffs/restrictions on our exports to them, we should place equal tariffs/restrictions on them. China is the worst offender of this.

    • DHZ

      Agreed. Level the playing field, make it equal, but not 35%

  • Marc P

    Uninformed knee jerk reactions of a 4 y.o. Sorry, but you voted for him…!

    • Burnerjack

      What are tariffs already burdened on US made goods and agriculture? Do you know?

      • Marc P

        I have no idea. I’m not saying all the international trade rules in place are 100% fair to everyone involved but it’s a complexe reality. Trump still thinks he has to win votes. Trump’s style of oversimplified out of touch remarks may work well to get votes but it’s quite another ball game when you actually have to face reality. He’s still applying what he knows: reality t.v. in your face comments that pleases his voter base in the moment, but that does little to actually address and solve complex problems.

        • Burnerjack

          He may sound glib but, imho, he is setting the stage for some serious renegotiations. Seems to me, he is actually announcing to the world that the US is under new management. In conclusion, I think President Trump is more shrewd than people think. But then, we won’t know until it all plays out. Please keep in mind that Mr. Trump, the ultimate outsider, the Dark Horse that BOTH parties did not want, that BOTH parties dismissed as a sideshow distraction, did what nearly everyone said couldn’t be done.
          THAT alone should give you and many others reason to pause.
          Can he do what he said he can do? I don’t know. I hope so, but we won’t know until it plays out. I do think he is smarter than many give him credit.

          • Marc P

            Time will tell. However you look at it though, negotiating implies give and take. You can’t have it all. Trump understands the taking part, but the giving part… not too sure! I’m no economist or historian, but I seem to remember that going too protectionist when everybody else is open to trade just doesn’t bode well for the protectionist, no matter how you try to slice the apple. The U.S. may be a big market but it’s not THAT big compared to the rest of the world. Crazy tarifs can go both ways and it’s in no way certain Trump’s “shrewdness” will ultimately favour those who elected him…

          • Steve Hanley

            I would suggest that “protecting American jobs” is going to translate into American’s paying more for things — especially automobiles. Not sure how happy the disaffected coal miners in Appalachia will be when the price of pick-em-ups shoots up by 10 – 15%.

          • Burnerjack

            Very true indeed. However, concerning coal miners paying 10-15% more for pick ups, those pick ups which cost 10-15% more are near infinitely more affordable when those miners are employed.

          • Steve Hanley

            Granted. But lets put unemployed coal miners to work building renewable energy facilities and then using their earnings to buy zero emissions or low emissions trucks.

            The larger point is that climate scientist say we will need to do more than reduce global emissions. We have have to actually live as a human community with little or no emissions going into the atmosphere for decades to offset the “overshoot” of rising temperatures.

            We are entering a period of global emergency and behaving as though climate change is just a minor nuisance. It is not. It is a loaded gun pointed directly at our heads and those of our children and grandchildren.

            At some point, we will ALL be unemployed because our planet will no longer be able to sustain human life as we know it. Seems to me we need to get our priorities straight.

          • Burnerjack

            Sounds good on paper, but what does a coal miner who’s known only coal mining his whole life (like his father before him, and his father before him) know about windmills? Don’t get me wrong, I want clean air, water land as much as anyone. My issue is about the degree that mankind’s effect actually has on global warming. How much man generated emissions compare to natural volcanic action, or the natural loss of albedo since the last ice age. Is the Earth warming? Seems to be the case. Is it a natural function of a dynamic planet? Some say yes, some say no.
            In the end, I do not believe that pollution, in any form is in any way a ;good thing’. However, I also must take into account the very realities that people deal with everyday. That includes economic realities as well as health, etc.
            For the record, I am hoping I can find an all electric vehicle that suits my needs at a price I can afford next time around. Not to save the planet, not to advance an agenda, nope. but because I think they are closer to the ideal.
            Less maintenance, greater reliability, better experience.

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