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Trump Threatens German Automakers With 35 Percent U.S. Import Tariff

January 16, 2017 0 Comments

Senior German officials were shocked by┬ácomments made by President-elect Donald Trump, who stated in an interview that NATO was “obsolete,” in addition to threatening German automakers with massive import taxes.

In an interview with German newspaper Bild and The Times of London, Trump said German car manufacturers could face tariffs of up to 35 percent if they set up plants in Mexico instead of the U.S., and attempt to export vehicles from there to the United States.

Sigmar Gabriel, Germany’s economy minister, told Bild that such tariffs would make “the American auto industry worse, weaker and more expensive.”

In the interview, Trump singled out BMW, saying that the automaker could face tariffs if it goes ahead with plans to open a plant in Mexico and sell cars to the United States. Trump also complained that German automakers don’t behave fairly, because many German cars are seen in the U.S. but few American cars exist in Germany. Responding to this heated comment, Gabriel suggested that the solution might be that “the U.S. needs to build better cars.”

“If you want to build cars in the world, then I wish you all the best,” Trump said. “You can build cars for the United States, but for every car that comes to the USA, you will pay 35 percent tax. 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.”

For its part, BMW said it is continuing forward with its plans to produce cars in Mexico. “The production is aimed at the world market,” BMW said, according to German news agency dpa. “Therefore the plant in Mexico will complement … the production plants in Germany and China.”

Another controversial statement in the Trump interview came when he called NATO “obsolete because it wasn’t taking care of terror,” in addition to saying that member organizations aren’t paying their “fair share.”

“A lot of these countries aren’t paying what they’re supposed to be paying, which I think is very unfair to the United States,” Trump said. “With that being said, NATO is very important to me.”

German Foreign Minister Frank Walter Steinmeier, who was in Brussels to meet NATO Secretary-General Jens Stoltenberg, said Trump’s comments had caused “surprise and anxiety” among members of the trans-Atlantic alliance.

Under pressure to deliver on campaign promises to revive U.S. industrial jobs, Trump has turned his attention to automakers that use low-cost Mexican plants to serve the U.S. market. He has also warned Japan’s Toyota that it could be subject to a “big border tax” if it builds its Corolla cars for the U.S. market at a planned factory in Mexico.

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