Trump threatens BMW and Mercedes

Trump threatens BMW and Mercedes

US President Donald Trump has again threatened Europeans with the increase in import duties for cars. On March 10, the Republican shared with his followers his views on relations with the EU and threatened:"We will impose the duties of Mercedes and BMW."Previously, the head of state expressed in Twitter that he wanted to raise the import levies - a question only of the tariffs on steel and aluminum, which Trump is willing to lift only if the EU abandons the barriers to American goods. Many Germans are alert to the development of the trade war, as Germany exports billions of dollars to the United States, but imports it from there. The US is the largest foreign car market for Europe - it accounts for 25% of the exported car sales (totaling € 192 billion). Second is China (16%, 237 billion dollars). Most of the half imported cars in the US are German - so the new tariffs would have a negative impact primarily on the Goethe producers. On the other hand, they produce hundreds of thousands of cars a year in the US (eg the BMW X3 / X4 / X5 / X6, the Mercedes-Benz GLS, the VW Passat, etc.) - and work a huge number of Americans. A fact Trump does not comment on...

Apparently, the reason for the dispute lies in the amount of duty - while imported cars from the US in the EU are only 10% passed, the EU imports into the US are"loaded"with a duty of only 2.5%. In fact, however, Germany is a thorn in Trump's eyes because, as a"champion"in international trade, it wins well on trade, but with regard to security issues, it relies on its partner in the United States. The problem is that Germany does not meet the requirement to provide 2% of GDP for defense spending, which is agreed between NATO member states. The federal government argues this with the fact that security spending also fell on the aid given to developing countries, but they did not fit into the defense budget.

What is the effect of the penalty duties?

They make imported goods more expensive. In this way, the US aims to reduce imports to sell more than domestic production. Import steel can rise by 25% and aluminum by 10%. Measures such as these usually do not last long - when in 2002 President George W. Bush imposed protectionist tariffs on steel, the EU"responded"with repayable duties. The result: In the US, tens of thousands of people have lost their jobs in the steel industry, and after two years the US has adjusted customs duties. Even if the customs do not come into force, the verbal (currently) war between Trump and the EU already has an impact on global market trends.

And what is the role of Musk?

In the whole scandal, Ilean Musk is also involved - who is pushing Trump to import import duties! But Muss wants to attack not so much the EU as China. There he wants to build a Tesla factory, but he faces resistance. Compared to China, the difference in tariffs is even higher - China imports 25% of US-imported cars, while Chinese in the US is only 2.5% more expensive.