Germany’s top three automakers to hold tariff talks at the White House

Germany’s top three automakers to hold tariff talks at the White House

The leaders of Germany’s three largest automakers will hold tariff talks with US Trade Representative Robert Lighthizer and Commerce Secretary

german automakers white house talks

Photo: Mercedes-Benz/dpa

The leaders of Germany’s three largest automakers will hold tariff talks with US Trade Representative Robert Lighthizer and Commerce Secretary Wilbur Ross at the White House today.

For months, the Trump administration has mulled over whether to increase the current 2.5% tariff on EU-made cars to 25%. President Trump insists this is necessary to ‘correct’ a trade imbalance that sees the EU slap a 10% tariff on US-made cars.

Volkswagen, Daimler (manufacturer of Mercedes) and BMW export more than half a million cars each year to the US. While this only constitutes about 5% of global sales, the US remains the second largest market for Daimler and BMW and the third largest market for Volkswagen.

Combined with slowing demand in China—the world’s largest car market, which is also suffering the effects of Mr Trump’s tariff spree—a 10-fold increase in US tariffs poses a serious risk to European automakers’ bottom-line.

Today’s talks are likely aimed at convincing top executives to move production to the United States. Indeed, Volkswagen is currently in “conversations” to set up an electric car factory in the US. Similar moves by other large European car makers will thrill Mr Trump and his supporters and could well stave off the much-mooted 25% tariff.

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