Threat of Tariffs Back in the News

Mercedes-Benz GLC

The headline in Wednesday’s New York Times said it all: “Trump Doubles Down on Threats to Impose Tariffs on European Cars.”

President Trump, attending the World Economic Forum in Davos, Switzerland, once again said he’s considering imposing tariffs on European automobiles if he can’t reach a trade agreement with the European Union.

“Doubling down” is an expression borrowed from the game of poker, and the president has illustrated his flair for gamesmanship in dealing with foreign automakers wanting to do business in the United States. He directly confronted Toyota Motor Corp. early on, complaining that it wasn’t investing enough in its American facilities. Toyota responded by noting that by 2021, it will have invested nearly $13 billion in U.S. operations, much of that in Alabama.

Trump declined to say this week what deadline he’s referencing concerning European automakers.

“They know that I’m going to put tariffs on them if they don’t make a deal that’s a fair deal,” he told the Wall Street Journal.

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According to the New York Times, German automakers at the end of last year quietly promised new investments in their American plants. Mercedes-Benz U.S. International Inc.  in Tuscaloosa County has so far already seen investments of more than $6 billion.

“Our industry benefits from clarity,” Ann Wilson, senior vice president of government affairs of the Motor & Equipment Manufacturers Association, told the Times last fall. Wilson said the threat of car tariffs “have caused our members to rethink investment in the United States,” she said.

Tariffs would also stand to harm German automakers BMW in South Carolina and Volkswagen in Tennessee.

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