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President Trump To Impose Total Ban On German Luxury Cars

02 June 2018
President Trump To Impose Total Ban On German Luxury Cars

President Donald Trump apparently wants to force German luxury vehicle manufacturers out of the United States, reportedly telling French President Emmanuel Macron during a recent state visit that he wants to get to the point where there will be no Mercedes-Benz models driving down New York's upscale Fifth Avenue.

Indeed, most of BMW's crossover range, including the popular X3 and X5, are built in the United States for local and global sale.

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.

A similar national security argument was presented when the president imposed steep tariffs on aluminum and steel imports from China, Russia, Germany and some other countries in March.

So Why Does Trump Want To Push Out German Cars?

"E.U. passenger-car imports from the United States were worth €6.2 billion (US$7.3 billion) previous year, while the bloc's USA exports topped €37 billion (US$43.1 billion)", said the newswire.

The European Union is planning retaliatory tariffs on US metal and meals items within the coming weeks, as soon as it calculates the precise value to European Union corporations of the USA tariffs.

The Trump administration has opened a trade investigation into whether vehicle imports have damaged the United States auto industry. How many Chevrolets do you see in Germany?

The news comes after the White House confirmed in a statement that Trump asked Commerce Secretary Wilbur Ross to consider whether imported cars and auto parts pose a threat to national security.

At the time, the president called Germany a great vehicle producer but said that the business relationship with the United States was an unfair one-way street. Once the dominant players in the American luxury market, they are now tier-two players behind a range of European and Asian imports, German brands in particular.

German auto companies export about 430,000 vehicles from US factories to the rest of the world, the VDA said. However, a more likely scenario would be a 25 percent import tariff.

"We've tried having protection tariffs before and all it does is start a trade war that adds reciprocal tariffs to our exports", said law professor Dan Joyner.

A ban like this would huge ramifications for the USA auto industry.