French President Convinced Trump Wants to Kill German Cars; Steel Tariffs Strike U.S. Allies

Matt Posky
by Matt Posky
french president convinced trump wants to kill german cars steel tariffs strike u s

There’s been quite a bit of the old “he said, she said” as the global trade war between developed nations coalesces. Germany has not covered U.S. President Donald Trump’s trade policy favorably, not that it has much reason to. His new tariffs on imported steel and aluminum has tested relationships with numerous countries and, while it isn’t the biggest exporter of metal to the United States, Germany has something to lose. Likewise, proposed duties on passenger vehicles have sincerely rubbed Deutschland the wrong way.

However, the issue was further complicated this week after a gossipy report surfaced claiming Trump told French President Emmanuel Macron in April that he would continue hampering the European auto manufacturers until there are no Mercedes-Benz vehicles driving in America.

Reported initially by German outlet Wirtschaftswoche (Economic Week) and followed by Reuters, the article claims several unnamed European and U.S. diplomats verified the story. In fact, the quotes given were taken from an interview conducted moments after his inauguration in 2017.

“When you walk down Fifth Avenue, everybody has a Mercedes-Benz parked in front of his house,” Trump said in the earlier interview with Bild. “You were very unfair to the U.S.A. It isn’t mutual. How many Chevrolets do you see in Germany? Not many, maybe none, you don’t see anything at all over there. It’s a one-way street.”

Wirtschaftswoche noted that an import duty of 25 percent would depress German GDP by roughly 0.16 percent. “No country would fear higher absolute losses through such an inch than Germany,” said Gabriel Felbermayr, director of the Ifo Center for Foreign Trade.

The outlet also said Trump’s reasoning for the tariff proposals were ill-conceived, suggesting he might not realize that BMW and Mercedes-branded cars built in the U.S. are also subject to the European Union’s 10 percent import fee. Of course, the same reasoning would apply to cars imported by Ford and General Motors under U.S. tariffs.

Since Macron’s administration declined to comment on the report, whatever Trump told him is unverified. However, this hasn’t stopped the article from being cited by numerous outlets — many of which are far bigger than Wirtschaftswoche and neglected to mention the claims would have benefited from additional corroboration. The outlets’ coverage of the U.S. president has been overwhelmingly unfavorable in the past. But we’re not ready to call its claims “fake news,” either.

Depending on how the United States’ trade investigation into vehicle imports goes, these new tariffs could become a real thing, unsettling the auto industry quite a bit. But it won’t stop German cars from populating American roadways. Both Mercedes-Benz and BMW have factories in the country already. All in, German manufacturers build roughly 800,000 vehicles annually within the United States. However, according to the industry group Verband der Automobilindustrie, its members also exported 657,000 foreign-built vehicles into North America last year.

While Trump proposed ludicrously high auto tariffs during his campaign, the issue has only come up in earnest within the last few months. Germany has been critical of his proposals but seems weary to respond with trade penalties of its own. This could be part of Trump’s strategy. Many claim his wildly aggressive trade proposals simply exist so he can negotiate for what he really wants at a later date. No country wants to become involved in an economic war with the United States.

There are holes to poke in that theory, though. Both Mexico and Canada (which sends more steel into the U.S. than anyone) were expected to receive amnesty from Trump’s steel tariffs. The very threat of the fee was presumed to be a negotiatory tactic and both countries were given a break from the tax while talks progressed. But the United States Commerce Secretary, Wilbur Ross, said discussions to reduce America’s trade deficit did not go as planned. Now NAFTA members and the EU are subject to 25 percent duty on steel and 10 percent on aluminum.

The president of the European commission, Jean-Claude Juncker, vowed swift retaliation after the announcement. He intends to make a case with the World Trade Organization and fire back with more import fees on American goods. It’s all rather surprising, as Europe and the United States have been close allies for decades at this point.

[Image: Mercedes-Benz]

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  • Tedward Tedward on Jun 01, 2018

    Wow guys. The us, driven gleefully by both parties, has been selling our manufacturing capacity out at the behest of our own domestic financial industry. We've used access to our consumer market as the carrot to our poorer foreign partners as well as the income generator for our outsourced manufacturing investments. Blaming this on one politician or party is fantasy land wishful thinking and leads me to believe anyone doing so is shamefully open to political propaganda. Also, the Obama contempt is bizarre, you don't have to agree with his policies to respect their man, his accomplishments are truly staggering and his personal life seems to be conducted with dignity. One needs to show that the manufacturing shift is a) Not in our interests and b) realistically reversible before launching into some hot winded diatribe about reversing the "vichy liberal" policies, which are anything but. Also, DJT supporters should really think about whether all of this is really about the countries long term interests or just another short term political move designed to personally benefit him (not the Republican party even). His track record so far is pretty biased towards the self dealing side of things.

  • Inside Looking Out Inside Looking Out on Jun 01, 2018

    You guys missing the big picture. It is not about Community Organizer or Reality TV Star being elected president. The issue is that any system evolves nothing stays static. The thinking that world order established after WWII by US, NATO or Warsaw Pact will persist forever in the same shape and form is deeply mistaken. NATO served its purpose well and is not needed anymore - SU is gone long time ago and attempt to turn Russia into enemy of Mankind does not work. EU is in deep crisis and it is a matter of time when both NATO and EU unravel. It is already happening. EU had a chance to establish single European Army, common European identity and culture, overcome nationalism and etc to become more like United States of Europe than collection of independent states. We in US also tired of spending huge amount of our hard earned money trying to protect and placate unruly children which world's former superpowers had become. It could not last forever and it did not. We want our money back, our infrastructure is crumbling, social security and national healthcare is a sad joke compared with developed European countries. It is time to invest into our own country and our own people. Thats why we elected Trump. Other candidates would be afraid to say "NO" to Europe and other so called "allies" and disband outdated structures. It is not the first time attempt of globalization fails. First it were Romans, then Europeans, Germans even came up with their own version of globalisation based on master race. PAX Americana came to the end too. Some progress was made but not enough. Now evolution turns in the new direction, rise of new found nationalism is evident and will wipe out outdated structures. New fresh beginning is due. Interesting times are ahead of us. Who will lead the new attempt of globalization and when this will happen - nobody can say. US is broke - it will be not us. China?

  • Jeff S I am not against EVs but I completely understand Toyota's position. As for Greenpeace putting Toyota at the bottom of their environmental list is more drama. A good hybrid uses less gas, is cleaner than most other ICE, and is more affordable than most EVs. Prius has proven longevity and low maintenance cost. Having had a hybrid Maverick since April and averaging 40 to 50 mpg in city driving it has been smooth driving and very economical. Ford also has very good hybrids and some of the earlier Escapes are still going strong at 300k miles. The only thing I would have liked in my hybrid Maverick would be a plug in but it didn't come with it. If Toyota made a plug in hybrid compact pickup like the Maverick it would sell well. I would consider an EV in the future but price, battery technology, and infrastructure has to advance and improve. I don't buy a vehicle based on the recommendation of Greenpeace, as a status symbol, or peer pressure. I buy a vehicle on what best needs my needs and that I actually like.
  • Mobes Kind of a weird thing that probably only bothers me, but when you see someone driving a car with ball joints clearly about to fail. I really don't want to be around a car with massive negative camber that's not intentional.
  • Jeff S How reliable are Audi? Seems the Mazda, CRV, and Rav4 in the higher trim would not only be a better value but would be more reliable in the long term. Interior wise and the overall package the Mazda would be the best choice.
  • Pickles69 They have a point. All things (or engines/propulsion) to all people. Yet, when the analogy of being, “a department store,” of options is used, I shudder. Department stores are failing faster than any other retail. Just something to chew on.
  • Kendahl 68 mph top speed? My 1962 VW beetle would do 80. This is a vehicle for the 3rd world. Does Citroen think that's what Europe will become?