Donald Trump threatens BMW, Daimler and Volkswagen with 35% US import tax

By @mik_mapa on
bmw
The Mercedes-Benz EQ electric concept car is displayed during the North American International Auto Show in Detroit, Michigan, U.S., January 10, 2017. Reuters/Rebecca Cook

Donald Trump has warned German car companies including BMW, Daimler and Volkswagen that the US government would impose 35 percent tax to vehicles imported to the US market. The president-elect wished that the companies all the best for building cars but warned them that they need to pay the import tax. 

Trump said that he would impose the tax to carmakers that use low-cost Mexican plants to serve the US market. The three German carmakers planned to manufacture their cars in Mexico. However, they emphasised that US plants are still in operation where they build high-end sports utility vehicles that are exported to Europe and Asia. Japan's Toyota was not exempted from the tariff and it could play higher import tax if it would manufacture Corolla cars in Mexico. 

BMW executive Peter Schwarzenbauer confirmed that the company has invested US$1 billion (AU$1.3 billion) for its new plant in Mexico. The plant would produce 1,500 jobs when it goes into production in 2019. The company's spokeswoman said that the plant in Mexico would produce the BMW 3 series -- an addition to the existing production facilities in China and Germany. The carmaker has invested US$2.2 billion (AU$2.9 billion) in Mexico and planned to produce 150,000 cars in 2019.

In 2016, the Audi division of Volkswagen has inaugurated a US$1.3 billion (AU$1.7 billion) production facility in Mexico. It planned to manufacture electric and petrol Q5 SUVs. Daimler has planned to assemble Mercedez-Benz in Mexico in 2018 as it would share a US$1 billion (AU$1.3 billion) facility with Renault-Nissan.

Trump recognised Germany as a great car producer but he claimed that Germans do not buy Chevrolets the same rate American did to their cars. Chevrolet sales in Europe have fallen after the announcement of General Motors that it would drop the brand in Europe. Meanwhile, BMW spokesman said that the company has supported almost 70,000 Americans through its largest plant in South Carolina.