Trump says no to dropping European tariffs

Trump wants European makers (primarily German) to build vehicles in the US

Published: March 23, 2019, 10:30 PM
Updated: March 29, 2019, 1:51 AM

2017 Mercedes-Benz G-Class

US President Donald Trump has told the Fox Business Network that the US will not drop tariffs on vehicle imports from Europe, which currently sit at 25%, and may even consider raising them.

UK within Europe

Trump said the European Union had proposed a deal to eliminate tariffs on all auto imports, but it was rejected, presumably because it involved some type of quotas. He added that the EU currently taxes US imports to the tune of $150 billion a year.

“I’m not willing to give up tariffs,” Trump told Fox Business Network's Maria Bartiromo. “A Chevrolet will never sell there like a Mercedes sells here.”

BMW Spartanburg SC facility

The preferred course of action, according to Trump, would be to have European manufacturers (which means German companies, primarily) build their SUVs in the US. Utility vehicles make up probably the hottest segment in North America at the moment.

“I’ll tell you what the end game is — they’ll build their plants in the United States. Then they have no tariffs,” he told Baritomo. “I want them to make them here. Instead of making them over there, make them here. If you're going to sell them to Americans, make them here.”

And he may be right, judging from the recent Daimler announcement that it plans to build an upcoming ultra-luxury Mercedes-Maybach SUV at its Alabama plant that currently builds the full-size GLS SUV, on which the Maybach model will be based. BMW also already builds SUVs in the US (in South Carolina).

2017 Mercedes-Benz GLS

Trump also said he ordered the Commerce Department to investigate whether European auto imports pose a security risk, as justification for raising tariffs on vehicles and parts in accordance with the Cold War Trade Expansion Act. He says the report concluded there wasn’t a security risk (except “to the balance sheet”) but would take the allotted 90 days to decide on tariff action (which would put a decision in the middle of May).