Photo: Vox
The President of the United States Donald Trump is continuing his more or less veiled threats to keep German car imports on the other side of U.S. borders.
After a very tense G7 Summit, where he reportedly told French President Macron that he was out to solve the issue of too many German cars being sold in the US, he’s at it again. German carmakers are bringing too many vehicles into the US, turning the country into a piggy bank that everybody is stealing from, to paraphrase an older statement of his on international trade.
“[The European Union doesn't] take a lot of what we have, and yet they send Mercedes in to us, they send BMWs in to us, by the millions,” Trump said, as cited by CNN Money. “It's very unfair, and it's very unfair to our workers and I'm going to straighten it out.”
In typical Trump fashion, he didn’t say what exactly he had in mind in terms of “straightening it out.” The threat is real, though: post-G7, Chancellor Angela Merkel said that the EU would take whatever action necessary if pushed on the issue of trade. If Trump raises tariffs on imports, the EU would strike back, it would not be pushed around anymore, she told reporters.
Threats and diplomatic tensions aside, the question of how Trump aims to discourage German carmakers from selling to the US is a very complicated one, the aforementioned publication stresses.
“The total number of cars produced by German automakers in the United States has increased by 180,000 since 2013 to 804,000, according to the German carmakers association. Half are exported to markets including Europe and Asia,” CNN Money writes.
All the major German carmakers have plants in the U.S., using U.S. materials and U.S. workforce to built the vehicles that they later sell to other countries. Actual import of cars actually made in Germany, or anywhere in the US for that matter, is insignificant.
Should Trump go ahead with his threat and close down factories that sell German cars, it would translate into a direct and resounding hit to the U.S. economy. If he’s thinking of increasing tariffs to discourage EU-made German cars from entering the U.S., the impact would be minimal.
“[The European Union doesn't] take a lot of what we have, and yet they send Mercedes in to us, they send BMWs in to us, by the millions,” Trump said, as cited by CNN Money. “It's very unfair, and it's very unfair to our workers and I'm going to straighten it out.”
In typical Trump fashion, he didn’t say what exactly he had in mind in terms of “straightening it out.” The threat is real, though: post-G7, Chancellor Angela Merkel said that the EU would take whatever action necessary if pushed on the issue of trade. If Trump raises tariffs on imports, the EU would strike back, it would not be pushed around anymore, she told reporters.
Threats and diplomatic tensions aside, the question of how Trump aims to discourage German carmakers from selling to the US is a very complicated one, the aforementioned publication stresses.
“The total number of cars produced by German automakers in the United States has increased by 180,000 since 2013 to 804,000, according to the German carmakers association. Half are exported to markets including Europe and Asia,” CNN Money writes.
All the major German carmakers have plants in the U.S., using U.S. materials and U.S. workforce to built the vehicles that they later sell to other countries. Actual import of cars actually made in Germany, or anywhere in the US for that matter, is insignificant.
Should Trump go ahead with his threat and close down factories that sell German cars, it would translate into a direct and resounding hit to the U.S. economy. If he’s thinking of increasing tariffs to discourage EU-made German cars from entering the U.S., the impact would be minimal.
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