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Show image in lightbox Import tax harms US interests
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Thomas Puls IW News 16. January 2017

German car manufacturers in the USA: Import tax harms US interests

Donald Trump attacked the German car industry and threatened with penalty taxes for car imports. In doing so, he overlooks the fact that German manufacturers have long been an important player in the US itself. They not only build for the US market, but are now among the most important vehicle exporters of the USA.

The US market is of great importance to German manufacturers: in the premium segment, they hold a market share of 40 percent. Recently, almost 550,000 vehicles worth over 30 billion euros were exported to the USA. This corresponds to about 10 percent of German production.

Trump is using this demand power to attack the German manufacturers. On the one hand, he asks the German car industry to cancel investment projects in Mexico in favor of factories in the USA. On the other hand, he criticizes the fact that there are too few vehicles from US production in Germany.

Donald Trump is also aware of the fact that his attack hits the US economy itself, because the USA are already an important production location for German manufacturers. Last year, more than 850,000 vehicles from German brands left the production lines in the USA. This is about 7 percent of the total US production and the trend is clearly rising. And: the US production of German manufacturers is sold only about half in the US, the rest is exported worldwide. Especially the premium manufacturers assemble their SUV models in the United States for the world market. The German manufacturers also made a large contribution to US car exports to Germany of about 176,000 vehicles.

Additionally, Trump should remind himself that Chevrolets are sold with the Opel badge in Germany.

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