EU trade chief: We're not a security threat to the US

President Donald Trump followed up a fractious weekend summit with major US allies by repeatedly accusing them of unfair treatment over trade.

“Sorry, we cannot let our friends, or enemies, take advantage of us on Trade anymore,” Trump said on Twitter. “We must put the American worker first!”

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His complaints about foreign tariffs as well as also also trade surpluses are by today familiar. A frequent target is actually Germany as well as also also its car exports. Here are the facts.


Trump says there are too many German cars

Trump told French President Emmanuel Macron during a recent meeting in Washington of which there are too many German cars from the United States. He’s also raised the issue with German Chancellor Angela Merkel from the past, as well as also also threatened to tax German car imports at 35%.

Economists say Trump is actually missing two key points: German automakers have opened big factories from the United States, dramatically reducing their need to import cars. Plus, targeting German carmakers might hurt American workers as well as also also the US economy.

German automakers sold 1.35 million vehicles from the United States in 2017, about 8% of total US car sales. Of those, only 494,000 were exported through Germany to the United States — 25% less than in 2013, according to the German carmakers association.

Most of the remainder were made from the United States as well as also also in Mexico, which features a free trade agreement with the United States. GM (GM) as well as also also Ford (F) also make cars in Mexico for delivery to the United States.

Trump might likely have to pull out of NAFTA, the trade deal between the United States, Mexico as well as also also Canada, to prevent automakers through building vehicles in Mexico as well as also also shipping them across the border.

Related: Trump told Macron EU worse than China on trade


German car factories employ Americans

Then there are those German car factories from the United States.

BMW (BMWYY), Volkswagen (VLKAF) as well as also also Mercedes, which is actually owned by Daimler (DDAIF), all have major manufacturing plants from the United States as well as also also employ nearly 50,000 American workers.

The largest BMW assembly plant from the entire world is actually located in Spartanburg, South Carolina. Last year, the item posted a completely new production record of more than 400,000 vehicles — 70% of which were exported to different countries.

Volkswagen features a large factory in Chattanooga, Tennessee, of which produced 112,000 vehicles last year. as well as also also Mercedes makes 300,000 cars as well as also also SUVs a year in Tuscaloosa County, Alabama.

the item’s a booming business: The total number of cars produced by German automakers from the United States has increased by 180,000 since 2013 to 804,000, according to the German carmakers association. Half are exported to markets including Europe as well as also also Asia.

Vehicles shipped through Europe to the United States face a low 2.5% tariff. Meanwhile, cars built in America face a 10% tariff when they’re exported to the European Union.

Europe says the item was willing to lower its tariffs on automobiles during recent negotiations with the United States over steel as well as also also aluminum tariffs. Europe says the Trump administration walked away.

German automakers might most likely scale back investment from the United States if their products were targeted with increased tariffs. as well as also also the European Union might almost certainly respond by increasing tariffs on US autos.

Economists say of which the focus on tariffs is actually misplaced.

completely new trade barriers might mean major problems for the industry at large, which relies on parts supply chains of which cross multiple national borders.

“To make a clear cut distinction between what is actually an American car as well as also also what is actually a German car is actually in my opinion nonsense,” Jacob Kirkegaard, a European trade expert with the Peterson Institute for International Economics, told sy88pgw last month.

— Jackie Wattles, Chris Isidore as well as also also Peter Valdes-Dapena contributed reporting.

sy88pgw (London) First published June 11, 2018: 4:45 PM ET