Achtung baby: Trump wants German cars out of America

German carmakers may be pushed out of the United States as President Donald Trump wants to stop them from cruising America’s highways, according to German magazine Wirtschaftswoche.

It cited several unnamed European and US diplomats claiming that Trump told his French counterpart Emmanuel Macron in April he would stick to his trade policy for long enough until no Mercedes-Benz models were rolling down New York’s Fifth Avenue.

The Trump administration has opened a trade investigation into whether vehicle imports have damaged the US auto industry. Within the EU, Germany is the biggest exporter of cars to the United States. German carmakers control 90 percent of the US premium auto market. BMW owns the Rolls-Royce and BMW brands. Daimler has Mercedes-Benz while Volkswagen controls Bentley, Bugatti, Porsche and Audi.

Data from the industry association ACEA shows that EU passenger car imports from the United States were worth €6.2 billion ($ 7.3 billion) last year, while exports to the country topped €37 billion. In 2017, German automakers assembled 804,000 cars in US plants, exporting another 657,000 to North America, according to the VDA industry association.

Trump is expected to decide on Thursday whether to end an EU exemption from tariffs on US imports of steel and aluminum. Berlin has already warned such a move could lead to a damaging trade war.

German authorities have criticized the investigation into vehicle imports, which could lead to tariffs of up to 25 percent on the same “national security” grounds that Washington used to impose metals duties in March. Analysts at Evercore ISI said last week imposing tariffs would cause a burden of €4.5 billion for German premium manufacturers, destroying their business.

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