It's the time of the year when the great and the good ('liberal elites' some would say) from around the world - around 3,000 politicians, company CEOs and the occasional film/pop star - get together in Davos, Switzerland, for the 'World Economic Forum'. They will have plenty to discuss this year. The rise of what is loosely termed 'populism' in the US and Europe, as well as causes and consequences, is sure to be a hot topic for discussion in the Alpine town's swish bars and restaurants.

Meanwhile, US president-elect Donald Trump (not attending Davos) is continuing to make remarks or Twitter postings that grab headlines. In his latest wide-ranging interview he has returned to the theme of international trade, specifically talking about the auto industry and its Mexican investments. This time, the German OEMs came in for a pounding that must have caused a fair bit of consternation in Wolfsburg, Munich and Stuttgart, as well as in Berlin.

How do you deal with that as a German OEM? Well, you can start by pointing out how mightily significant your US investments are. That's step one and I see that BMW has already done that. You can leave it there, but there's the danger that Trump will come back to the subject later and deliver another public berating (as he did repeatedly with Ford). Step two requires a little bit of fancy footwork in the corporate communications department. It means having a good look at the North American manufacturing strategy with a view to throwing Donald Trump a bone.

Is there anything happening (or that can be brought forward) as an announcement specifically regarding US manufacturing? Is there a business generated move that lends itself to a political interpretation that would take the sting out of the Mexico criticism? The cynic could maintain that is what Ford cleverly did when it cancelled a new Mexican plant and said it is upping investment in the US (but next Focus is still going to another Mexico plant). Trump claimed the credit for Ford's US investment announcement and duly said 'thank you'.

Is the president-elect serious about imposing 35% import tariffs on US car imports from Mexico?  And, if that approach to international trade is followed through, what response will it get from the rest of the world? That's something for discussion in Davos. Look out for what the Chinese president, Xi Jinping, has to say about globalisation and world trade. It is significant that he is in Davos, wanting to communicate China's viewpoint to the wider world. Hopefully, Donald will, at least, listen from afar.

International trade and its associated economic benefits are at the heart of global economic growth. Improved management of the world's trading system - to make it 'fairer' - is a legitimate political aim. Not everyone is buying in to the benefits of globalisation or feels that the international order works in their interests. People are protesting. However, a big swing to trade protectionism would hurt everyone.

Trump threatens German OEMs with 35% US import tariffs

just-auto

The editor's week


It's the time of the year when the great and the good ('liberal elites' some would say) from around the world - around 3,000 politicians, company CEOs and the occasional film/pop star - get together in Davos, Switzerland, for the 'World Economic Forum'. They will have plenty to discuss this year. The rise of what is loosely termed 'populism' in the US and Europe, as well as causes and consequences, is sure to be a hot topic for discussion in the Alpine town's swish bars and restaurants.

Meanwhile, US president-elect Donald Trump (not attending Davos) is continuing to make remarks or Twitter postings that grab headlines. In his latest wide-ranging interview he has returned to the theme of international trade, specifically talking about the auto industry and its Mexican investments. This time, the German OEMs came in for a pounding that must have caused a fair bit of consternation in Wolfsburg, Munich and Stuttgart, as well as in Berlin.

How do you deal with that as a German OEM? Well, you can start by pointing out how mightily significant your US investments are. That's step one and I see that BMW has already done that. You can leave it there, but there's the danger that Trump will come back to the subject later and deliver another public berating (as he did repeatedly with Ford). Step two requires a little bit of fancy footwork in the corporate communications department. It means having a good look at the North American manufacturing strategy with a view to throwing Donald Trump a bone.

Is there anything happening (or that can be brought forward) as an announcement specifically regarding US manufacturing? Is there a business generated move that lends itself to a political interpretation that would take the sting out of the Mexico criticism? The cynic could maintain that is what Ford cleverly did when it cancelled a new Mexican plant and said it is upping investment in the US (but next Focus is still going to another Mexico plant). Trump claimed the credit for Ford's US investment announcement and duly said 'thank you'.

Is the president-elect serious about imposing 35% import tariffs on US car imports from Mexico?  And, if that approach to international trade is followed through, what response will it get from the rest of the world? That's something for discussion in Davos. Look out for what the Chinese president, Xi Jinping, has to say about globalisation and world trade. It is significant that he is in Davos, wanting to communicate China's viewpoint to the wider world. Hopefully, Donald will, at least, listen from afar.

International trade and its associated economic benefits are at the heart of global economic growth. Improved management of the world's trading system - to make it 'fairer' - is a legitimate political aim. Not everyone is buying in to the benefits of globalisation or feels that the international order works in their interests. People are protesting. However, a big swing to trade protectionism would hurt everyone.

Trump threatens German OEMs with 35% US import tariffs

Dave LeggettDave Leggett
Managing Editor


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