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, reports Fox Business.
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,” said Robert Halver, head of capital markets analysis at Baader Bank.
Do you think Cubans are fighting for healthcare or freedom from Communism?
Exactly! We the People are in the driver’s seat and always have been. Our previous leaders have been selling out our country to benefit foreign countries. A look at Detroit today, compared to the Detroit of 30 years ago, clearly tells you all you need to know about the stupidity of our former elected leaders in regard to foreign trade.