US president-elect Donald Trump has warned German OEMs that he will impose a 35% border tax on vehicles imported to the US.
In an interview with German newspaper Bild, Trump criticised the German carmakers – BMW, Mercedes and VW – for failing to produce more cars in the US.
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All three have invested heavily in low-cost Mexican capacity used for exporting to the US.
Trump has criticised a number of companies – most notably Ford, but General Motors also and Toyota earlier this month – for their North American manufacturing sourcing strategies that he says favour low-cost Mexico, under the NAFTA, over investing in the US. He appears now to be targeting the German OEMs in a wide ranging interview that also described the EU as an instrument of German domination designed with the purpose of beating the US in international trade.
“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 35 percent tax,” Trump told the newspaper.
“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,” Trump said, adding that carmakers will instead have to build plants in the US.
Trump went on to say Germany was a great car producer, noting that Mercedes-Benz cars were a frequent sight in New York, but claimed there was not enough reciprocity. Germans were not buying Chevrolets at the same rate, he said, calling the business relationship an unfair one-way street.
Chevrolet sales have fallen sharply in Europe since GM decided to end sales of the low-cost Chevrolet brand in Europe (Daewoo legacy with models for Europe built in Korea) by the end of 2015. GM has focused instead on promoting its European-sourced Opel and Vauxhall brands.
BMW responded by pointing out that its factory in the US is its largest in the world and that a new, smaller factory in Mexico will make cars for its global customers and not just Americans.
A BMW plant in the city of San Luis Potosi will build the BMW 3 Series starting from 2019, with the output intended for the world market. The plant in Mexico would be an addition to existing 3 Series production facilities in Germany and China, displacing 3 Series production at the company’s plant in South Africa. .
Last year VW’s Audi division inaugurated a production facility with 150,000 vehicle production capacity near Puebla, Mexico. Audi said it will build electric and petrol Q5 SUVs in Mexico.
BMW breaks ground for Mexico plant
