US President Donald Trump wants to escalate his trade war to include a total ban on German luxury cars, says a report in WirtschaftsWoche. According to the German publication, which says its report results from talking to several unnamed US and European diplomats, during French President Macron’s recent visit to Washington, Trump told him that he would “maintain his trade policy until no Mercedes models rolled on Fifth Avenue in New York.”
This news follows news last week that Trump had already asked Commerce Secretary Wilbur Ross to launch an investigation into the national security threat posed by imported cars, trucks, and auto parts; Trump is also considering adding 25 percent tariffs on imported vehicles. WirtschaftsWoche‘s article points out that just prior to his inauguration in 2017, Trump railed against the Mercedes-Benz vehicles he saw in New York.
When you walk down Fifth Avenue, everyone has a Mercedes-Benz in front of their house.” But that’s not reciprocity. “How many Chevrolets do you see in Germany? Not too many, maybe none at all. You do not see anything over there; it’s a one-way street,” said the real estate billionaire. Although he is for free trade, but not at any price: “I love free trade, but it must be a smart trade, so I call it fair.
The US market is extremely important for luxury German automakers, and a ban on importing new vehicles would be devastating for brands like Audi, BMW, and Mercedes-Benz. But even if Trump gets his wish, an import ban is highly unlikely to have the effect he’s looking for. Both BMW and Mercedes-Benz maintain large manufacturing presences here in the US, in part because any vehicles they build and sell here are exempt from existing import tariffs.