Trump Tariff Threats Targeted German Automakers: Report

At his April meeting with French president Emmanuel Macron, US President Donald Trump said he would stick to his guns on a policy whose aim was to keep German cars from rolling down Fifth Avenue.

That’s according to a report from German magazine, Wirtschaftwoche, which claims that President Trump was intent on keeping German vehicles out of the US market through burdensome tariffs of 25%, though he had threatened to impose 35% tariffs in 2017.

While the president is reported to have used Mercedes in his rhetoric, such tariffs would have had an especially negative effect on Audi and Porsche, which, unlike BMW and Mercedes, has no US factories. Volkswagen, too, would have been at risk since only the Passat and Atlas are currently made in the US.

Such large tariffs would cost German automakers $5.25 billion and would effectively scupper the business case for German automakers, from whom the US receives the most automotive imports in the EU.

Last year, the Volkswagen Group delivered more than 975,000 vehicles to the US (whereas all German manufacturers built just 804,000 cars in the US last year). That accounts for 9% of the Group’s worldwide sales.

The value of EU exports to the US, meanwhile, was worth $43 billion, reports Automotive News. American exports to the EU, however, only accounted $7.3 billion—although GM was in the middle of pulling out of the European market last year and has now done so.

As it stands, European automakers still have an exemption from Trump’s tariffs, but Trump is expected to decide whether or not to end that exemption today, which could extinguish our hopes of ever seeing the Mk8 Golf R.

[source: Wirtschaftwoche via Automotive News]