Awhile back, President Trump mentioned something of a tariff on all imported goods from Germany. It was part of the Trump Administration’s “America First” policy, which sees to put an extra tax on all imported goods. This tariff threat didn’t sit well with German Chancellor Angela Merkel, who feels that it hurts the free market. So a meeting was scheduled between Merkel and Trump for Tuesday at the White House, but a snowstorm delayed it. So the meeting will be held today and Merkel is bringing the auto industry with her.
Apparently, it isn’t unheard of for German leaders to bring CEOs of German business people with them to meetings. So BMW CEO Harald Krueger and two other German CEOs, the head of Schaeffler and Siemens, are expected to join Merkel in her meeting with Trump. Their job will be to stress how many American workers are currently employed by German companies.
One of the larger issues between the US and Germany right now is Trump’s plan to tax all BMW vehicles built in Mexico and imported to the United States 35 percent. Considering that BMW is investing heavily in its Mexico plant, this does not sit well with the Bavarians. “America profits from free trade. We are supporters of free trade and not of protectionism,” said Krueger in Geneva.
The biggest source of tension for President Trump is Germany’s $54 billion trade surplus, which is largely due to the auto industry. We important thousands and thousands of German-made automobiles every year an export very few to Germany. However, Merkel points out that in a recent meeting in Munich, every one had iPhones on the table, a product made by an American company. “We’re proud that we have good products, just as the Americans are proud that they have good products,” said Merkel.
Trump also recently made a jab that Germany’s strong economy is only due to a currently weak Euro. President of Germany’s VDMA engineering industry association, Carl Martin Welcker, retorted, stating “The accusations of President Donald Trump and his advisers are plucked out of thin air,”.
According to Welcker, 81,000 people are employed in the US by German-owned engineering firms. This also coincides with BMW’s argument that the Bavarian brand employs thousands of American workers, between its Spartanburg, South Carolina plant (which is the company’s largest in the world) and its offices in Silicon Valley.
What’s best for both sides is a free and open trade relationship, as it benefits both countries and this is something that I think every side can agree on. “We call on those responsible to do everything possible to avoid a standstill or even a worsening of our trade relations. In a trade war, there can be no winners as the global economy is too networked and our supply chains too international.”said Bernhard Mattes, Head of the American Chamber of Commerce in Germany.
Mattes also points out that America had its greatest period of growth during a trade deficit with Germany that’s lasted 35 years. He notes that increasing tariffs can only benefit temporarily and does not sustain long-term growth. “Protectionist measures like punitive customs, import taxes or the termination of international trade treaties would therefore only help the U.S. economy temporarily,”.
Hopefully, both sides can leave this meeting on positive notes and with constructive agreements.
[Source: Automotive News]
We do not have trade between countries, yes you can aggregate the total, but trade is merely the result of millions of transactions between willing participants.
I do not see how giving American consumers less choice, through the introduction of trade barriers, is a good idea. Remember all of those dollars foreign companies earn are a net benefit to the US capital account. They must buy dollar denominated assets, such as treasury bonds, or invest in other dollar denominated assets.
Worst episode of Celebrity Apprentice ever. How do we fire Trumpf?
Hey guest, I am german and I do support Trump’s policy to tax all Bmw vehicles made in Mexico, if they are meant for the U.S. market. So what?
So nothing, you can’t vote for him so your support is irrelevant. I have hated that self-promoting con man for 30 yrs. & loved BMW for 50, I’m just being consistent. Sadly, so is he. Your support + my hate = a whole lotta nuthin’! Given the # of Americans who sell, service & manufacture BMW’s, Trumpf will only be hurting more of the U.S. economy & his base (ditto his attempt @ a budget). I prefer when he worked with Gary Busey & Kate Gosselin.
If Trump wants to get rid of his trade deficit via the Auto industry, perhaps he should be meeting with the CEO’s of American Car Companies, and persuading them to build cars that Europeans want to buy, and then… actually sell them in Europe! That would be the constructive way to do it.
We have Ford here in europe.
Opel anyone? L’opel?
Vauxhall in the UK.
And Holden down under. But aren’t Vauxhall rumoured to be doing a big final Brexit?
No Vauxhall in the Benelux my friend. We have Opel. Vauxhall is only sold in the UK (+ Ireland) if i’m not mistaking.
Opel and Vauxhall are now under the french auto group PSA (Peugeot-Citroën).
I drive one.
I’m talking about desirable higher margin cars, aspirational brands, that kind of thing… Fords are motoring ‘appliances’.
We have them here in the area where I live.
They tried for premium, Jag, Aston, Rover. Didn’t work. Wouldn’t even put their luxury brands near their Ford stands at car shows. Nearly killed them like GM killed Saab & Hummer.
Jaguar, Aston Martin, Rover etc. were all european brands… why isn’t America trying harder to sell us American Luxury, and American Performance..
Yes, but Ford owned them for a while & tried to brand them with Lincoln as their Premier Automotive Group. Now they only have struggling Lincoln.
GM is a disaster. Ford isn’t gonna do it. (not really) I expect nothing from FCA neither, except maybe some high end Jeeps.
https://m.youtube.com/watch?v=Mo8Qls0HnWo
Bring this car in retro design. I will buy it.