Shares in German carmakers BMW, Daimler and Volkswagen fell on Monday after United States President-elect Donald Trump warned he will impose a border tax of 35 percent on vehicles imported from abroad to the U.S. market.
All three carmakers have invested heavily in factories in Mexico, where production costs are lower than the United States, with an eye to exporting smaller vehicles to the U.S. market.
In an interview with German newspaper Bild on Sunday, Trump sharply criticised the German carmakers for failing to produce more cars on U.S. soil.
"Freetrade is certainly under threat. But everyone in Europe knows - especially in Germany - that as an export nation, the U.S. has more leverage. They have the bigger market and a stronger domestic economic activity. They do not depend on exports as much as Germany does. And if they decide to tighten the thumbscrews we will not have a choice but to obey. Because otherwise jobs in Germany will face difficulties. So car makers will think about more investment in the U.S. now to calm down Mr. Trump", said Robert Halver, head of capital markets analysis at Baader Bank.
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5 comments:
It's what we need in America - strong leadership with the interests of the American people as the number one priority.
By making it more expensive to purchase a quality vehicle?
Buy their stock now. Ten percent or less of what this clown runs on about will happen. And yes...Asian and European autos are quality.
Companies will follow suit and will invest in America again. It's an exciting time and I am ready for America to be great again.
Robert Halver is starting to get the picture.
I'm lovin' it.
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