President Donald Trump has reportedly threatened to push German luxury cars out of the United States.
According to German magazine Wirtschaftswoche, Trump had told French President Emmanuel Macron in April that he aimed to push German carmakers out of the US altogether.
Macron’s administration in Paris declined to comment on the report.
The article, which cited several unnamed European and US diplomats but did not include any direct quotes, could not be independently verified, while a US Embassy spokesman in Berlin referred questions to Washington.
President Donald Trump has reportedly threatened to push German luxury cars out of the United States
According to German magazine Wirtschaftswoche, Trump had told French President Emmanuel Macron in April that he aimed to push German carmakers out of the US altogether. Pictured is a BMW i8 hybrid sports car
Last week, the Trump administration opened a trade investigation into vehicle imports, which could result in a 25 per cent tariff on cars on the same ‘national security’ grounds Washington used to impose metals duties in March.
This could destroy exports by German carmakers, which control 90 per cent of the US premium market and are the biggest European Union exporters of cars to the US.
BMW owns Rolls-Royce, while Daimler has Mercedes-Benz and Volkswagen controls Bentley, Bugatti, Porsche and Audi.
Daimler, BMW and Audi declined comment. Porsche was not immediately available for comment.
BMW shares were trading 0.5 per cent lower at 9.39am GMT, while Daimler and VW’s shares were down 1 per cent and 1.6 per cent respectively, underperforming Germany’s blue-chip DAX.
Trump has railed against German carmakers before and in early 2017, in an interview with German newspaper Bild, he said he would impose 35 per cent tariffs on imported cars.
At the time, the president called Germany a great car producer but said that the business relationship with the US was an unfair one-way street.
Germany’s auto industry association VDA says its members exported 657,000 vehicles to North America last year, with total exports of vehicle components, cars, engines, as well as second-hand vehicles totaling 31.2 billion euros in 2016.
Last week, the Trump administration opened a trade investigation into vehicle imports, which could result in a 25 per cent tariff on cars on the same ‘national security’ grounds Washington used to impose metals duties in March. Pictured is an Audi S3
This could destroy exports by German carmakers, which control 90 per cent of the US premium market and are the biggest European Union exporters of cars to the US. Pictured is a Porsche
Imports from the US to Germany amounted to 7.4 billion euros, meaning a trade deficit of 23.8 billion euros the VDA’s latest available figures show.
However, German brands also have huge factories in the US, where they built 804,000 cars last year, VDA said, providing jobs for US workers.
Berlin has reacted angrily to the US vehicle imports investigation, but the head of Germany’s BDI industry association Dieter Kempf on Thursday called for prudence in the growing trade tensions between the EU and the US.
If the EU imposes countermeasures, it must expect Trump to come up with further measures, he told Deutschlandfunk radio.
EU passenger car imports from the US were worth 6.2 billion euros ($7.3 billion) last year, while the bloc’s US exports topped 37 billion euros, according to Brussels-based industry association ACEA.
The threats made to the car sector are part of a bigger trade dispute with the US.
A 25 per cent tariff would destroy the business case for German carmakers to export to the US, and mean a 4.5 billion euro hit for Germany’s premium manufacturers, analysts at Evercore ISI said in a note last week.
Audi and Porsche are seen to be particularly vulnerable because they do not have US factories, while Mercedes-Benz and BMW have large established plants which could more easily allow them to expand local production capacity if imports were curtailed.