Germany defends car industry after Trump assault

Germany defends car industry after Trump assault
German Vice Chancellor and Economy Minister Sigmar Gabriel today warned US President-elect Donald Trump not to slap punitive tariffs on imports from carmakers like BMW, Daimler and Volkswagen. "The American car industry will be worse, weaker and more expensive" if Trump were to levy a 35-percent tax on German cars, Gabriel told mass-market newspaper Bild.

He added it would also hurt US carmakers if components were subject to higher duties. More German cars could be seen on the streets of New York than US cars on German streets, the Republican election victor had complained in an interview released yesterday. Gabriel responded that "the US will have to build better cars" if they want to change that.

"It doesn't help to make others weaker, you don't yourself get stronger by doing that," he added. Trump singled out Munich-based luxury carmaker BMW in his interview with the Times of London and Germany's Bild, saying the firm would face the swingeing tariffs if it continued construction of a planned factory in Mexico, rather than the US.

A BMW spokesman told AFP today that construction at its factory in San Luis Potosi, Mexico, is "continuing as planned and expected to be finished in 2019". Series 3 cars to be built at the plant "are planned to serve the global market", and not just the US, he said. "We are a net exporter from the USA," he went on, pointing to the firm's largest factory worldwide in Spartanburg, South Carolina.

That facility produced more than 400,000 vehicles in 2016 and directly or indirectly supports almost 70,000 jobs, the spokesman added. "The US isn't just an important export market for German carmakers, but also an important production site which delivers to the world market," Matthias Wissmann, president of the German Association of the Automotive Industry, said in a statement.

More than half the vehicles German firms produce in the US are then exported to third countries, he went on. "Erecting tariffs or other barriers to trade would be a self-inflicted wound for the US in the long term" if other countries responded in kind, Wissmann said.

Gabriel told Bild that he expected Trump to change after being sworn in as president on Friday, when he will "realise how diverse the economic links" between the US and Germany are.

"My only advice is not to get agitated," he said of Germany's future dealings with the US under the president-elect. "Not only we Germans, but we Europeans as a whole, we aren't somehow outmatched by him. We ourselves have something to bring to the table."
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