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Reports Suggest That the Trump Administration Wants to Push German Luxury Cars Out of the U.S. Market

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These reports indicate that German automakers like BMW, Mercedes-Benz, and Volkswagen may soon face uncertain fates when it comes to their future in the U.S. Market

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The future of German automobiles in the U.S. in currently under question

President Donald J. Trump’s distaste toward Germany’s automotive presence in the United States is no secret. Despite once owning several Mercedes-Benz and BMW models, Trump has been critical of how many German cars are on American roads since becoming President of the United States.

According to German magazine WirtschaftsWoche, Trump may be preparing to take serious action against German automakers. The magazine reports that President Trump’s administration is considering a move to block German luxury automakers from the U.S. market entirely.

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Citing several anonymous diplomats from both the U.S. and Europe, the business magazine reported that this desire to remove German automakers from the U.S. market emerged during a meeting that Trump had with French President Emmanuel Macron last month. During said discussion, Trump reportedly shared his mission of initiating a trade policy that would stop “Mercedes-Benz models from driving down Fifth Avenue.”

This initiative may not come to fruition, but recent events indicate that it will soon become a real possibility. Earlier this month, the U.S. Department of Commerce launched an investigation into automotive imports, with the aim of determining whether they threaten to impair the national security of the United States.

Depending on the results of the investigation, tariffs of up to 25% could potentially be put in place for automotive imports. Just today, the White House imposed tariffs of 25% on imports of steel and 10% on imports of aluminum from Mexico, Canada, and the EU.

Donald Trump

President Trump has certainly not shied away from criticizing German automakers
Photo; YouTube

Currently, German carmakers control 90% of the U.S. Premium market. Additionally, imports from the U.S. to Germany amounted to 7.4 billion euros, resulting in a 23.8 billion euro trade deficit.

Nevertheless, punishing German automakers with heavy tariffs could have unintended consequence on the U.S. economy. For example, German automakers have built numerous U.S-based factories, including the BMW U.S. Manufacturing Plant in South Carolina, where they built a total of 804,000 cars domestically last year and currently employ thousands of American automotive workers.

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The stock market has already responded to these reports. BMW’s shares were trading 0.5% lower, shares for Daimler were down 1%, and shares for Volkswagen were down by 1.6%.

No official statement regarding these reports has been issued by either Trump’s administration or Macron’s. Still, if this rumored policy does come to fruition, it will undoubtedly have major repercussions across the entire automotive industry.

News Sources: ReutersWirtschaftsWoche