German Vice Chancellor Turns Down Trump's German Car Comments

Shares in the German auto makers BMW, Volkswagen and Daimler, have fallen as Donald Trump informed that cars built in Mexico would face a tax of 35 per cent if they were exported to the US.

While BMW may have been singled out by Trump, it isn't alone.

In his interview, Trump also said that his administration would slap a 35 percent tariffs on BMW cars imported into the United States.

What will happen next for the auto firms?

BMW executive Peter Schwarzenbauer told reporters that the company will stick to its plans to invest about $1 billion in a new plant in Mexico.

Since 1997, Daimler has produced Mercedes-Benz automobiles at a plant in Tuscaloosa, Alabama, where in 2015 the company announced it would invest $1.3 billion in order to increase output.

Sigmar Gabriel Germany's deputy chancellor, and minister for the economy has responded to the U.S. president-elect's comments.

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Speaking to Bild, he said: "The US vehicle 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 per cent tariff".

Germany's Vice Chancellor and Economy Minister Sigmar Gabriel told Bild that imposing such tariffs would make "the American auto industry worse, weaker and more expensive".

Matthias Wissmann, president of German vehicle industry body VDA, said the United States would "shoot itself in the foot" by imposing tariffs on imported cars. "Not too many, maybe none, you can see nothing over there, it's a one-way street", Trump said.

Trump's comments are the latest that threaten actions against manufacturers who make cars in Mexico for export to the US, prompting some conciliatory gestures by the targeted companies. In fact, BMW is the largest US exporter of cars. Our U.S. plant in Spartanburg, South Carolina is now our largest in the world, producing more than any other BMW plant - 411,000 vehicles in 2016.

German automakers employ 33,000 people in the US and German suppliers count another 77,000, Wissman said. Every German carmaker has or is building capacity in Mexico to supply the U.S.as well as South American markets. Ford actually pulled the plug on its plans to build a $1.6 billion plant in Mexico two weeks ago, and said it would invest in an expansion of a MI plant instead. He suggested that the company should build its plant in America. I should add, the highly popular BMW X models were born here in the United States beginning with the X5 in 1999. BMW has committed to building the BMW 3 Series from 2019 at a plant in the Mexican city of San Luis Potosi.

"I think she made one very catastrophic mistake and that was taking all of these illegals, you know taking all of the people from wherever they come from". "I welcome him to call me to talk about BMW and SC".

Donald Trump seems in no mood to relent on his war on manufacturers who make their products outside and sell in America.

  • Toni Ryan