Trump wants to bar German luxury cars in U.S

EnlargeChris Kleponis  Pool via Bloomberg

EnlargeChris Kleponis Pool via Bloomberg

Berlin has reacted angrily to the USA vehicle imports investigation, but the head of Germany's BDI industry association Dieter Kempf on Thursday called for prudence in the growing trade tensions between the European Union and the United States. No U.S. news agency has confirmed Trump's reported remarks to Macron. A spokesperson for the French Embassy declined to comment. After being elected but before he took office, Trump also pledged to place a 35 percent tax on every German vehicle brought into the U.S.

"That German cars are a thorn in the side of US President Donald Trump has been known for some time", a Google translation of the WirtschaftsWoche article says.

The Trump administration has opened a trade investigation into whether vehicle imports have damaged the USA auto industry.

BMW owns Rolls-Royce, while Daimler has Mercedes-Benz and Volkswagen (VOWG_p.DE) controls Bentley, Bugatti, Porsche and Audi. Although he is for free trade, but not at any price: "I love free trade, but it must be a smart trade, so I call him fair".

There's also the fact that a number of German automakers already have huge manufacturing presences in the US.

Those brands collectively turned out roughly 804,000 cars from their factories in the USA, but also shipped over 657,000 vehicles from Germany to North America, Reuters reports.

The threats made to the auto sector are part of a bigger trade dispute with the United States. The U.S. market for luxury cars is dominated by German automakers, which account for around 90 percent of luxury vehicle sales.

The president has shown he's not afraid to get into trade wars with even America's closest allies. BMW, Mercedes-Benz and Volkswagen now build cars on USA soil.

Imposing such a tariff would destroy the business case for German carmakers to import into the United States, and cause a burden of 4.5 billion euros for German premium manufacturers, analysts at Evercore ISI said in a note last week.

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