Berlin (Reuters) – Audi, a subsidiary of Volkswagen, plans to strengthen its presence in the United States, while Mercedes will increase its production there, while European manufacturers seek to protect themselves from possible customs duties imposed by Donald Trump.
Donald Trump increased customs duties on aluminum and steel and threatened to impose others on imports from Mexico and Canada, as well as all cars and semiconductors, putting Under pressure from European car manufacturers already weakened by high costs and Chinese competition.
Customs duties will be on the agenda of a meeting in Brussels on Friday, between Maros Sefcovic, the European Commerce Commissioner, and representatives of the automotive sector, suppliers and battery manufacturers.
Maros Sefcovic met his American counterparts in Washington earlier this week and said that he had noted a certain desire to reduce customs duties on both sides.
Audi, who does not yet have a factory in the United States, plans to manufacture its key models there and announce a site this year, its chairman of the executive board in Reuters told Reuters.
Mercedes-Benz’s financial director Harald Wilhelm told investors on Thursday that the luxury brand, which exports high-end vehicles and sedans in the United States from Europe, will locate more production in its Tascaloosa factory , in Alabama, in order to protect itself from increasing trade tensions.
European exports to the United States reached 800,000 vehicles last year, or four times American exports to Europe.
According to Jato Dynamics, the three major German car manufacturers represented 73% of EU car exports to the United States last year.
“Whatever the tour of the trade war, German car manufacturers are almost always the losers,” said Guillaume Dejean, an expert in the automotive industry at Allianz Trade, in a research note.
Mercedes-Benz and BMW, which are both major exporters of the United States, have an American production which gives them more flexibility to reorganize production and make room for local sales.
The BMW purchasing director said at the start of the week that the car manufacturer did not see the need to negotiate a special agreement to be exempt from American customs duties, highlighting his important presence in the United States and his good relations with the authorities of the state of South Carolina.
Oliver Zipse, Chairman of the BMW Management Board, asked the EU to answer Donald Trump’s call and lower his customs duties by 10% on car exports from the United States to 2.5 %, aligned with current American customs duties on European imports. This would benefit BMW, which exports 90,000 cars per year to Europe.
Quarrels on the management of customs duties occur at a difficult time for the German automotive industry, while VW seeks to reduce its production and eliminate jobs to reduce its costs.
Guillaume Dejean said it was more urgent than ever for the industry to find the funds necessary to strengthen its defenses against competition and trade tensions.
“This is a balance exercise: of course, investing in new markets costs money, at a time when funds are limited,” he said. “But if it’s not now, when?”
(Victoria Waldersee report, Elena Smirnova, edited by Augustin Turpin)
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