German Carmakers Targeted by Trump Help Power U.S. Auto Exports

Jun 02, 2017

A worker inspects a vehicle on the production line at the BMW manufacturing plant in Spartanburg, South Carolina, on Jan. 11, 2012. Photographer: Ariana Lindquist/Bloomberg

President Donald Trump likes to complain that Germany is worsening the U.S. trade deficit by selling too many cars in America. In fact, German automakers help power U.S. exports.

BMW AG’s biggest factory globally is in Spartanburg, South Carolina. Daimler AG is spending $1.3 billion to expand its 20-year-old Mercedes plant in Tuscaloosa, Alabama and plans to source more parts locally. Sport utility vehicles and sedans produced at those sites make BMW and Mercedes two of America’s five biggest auto exporters.

 

Trump lit into Germany again Tuesday, complaining on Twitter about the U.S.’s “MASSIVE trade deficit” with Europe’s largest economy. Last week, meeting with European Union leaders, Trump said Germany is “very bad” for flooding the U.S. with cars. Germany posted a record trade surplus in 2016, and cars were indeed a big reason.

 

The U.S. took in 107 billion euros ($120 billion) of German exports last year, making it the biggest market for that country’s goods. The U.S. also sold 58 billion euros of products to Germany at the same time, resulting in a 49 billion-euro trade deficit for the U.S. But the U.K.’s deficit with Germany was even bigger, according to government statistics.

 

For many German companies, the U.S. represents one of their most lucrative markets. In addition to the car industry, chemical and equipment manufacturers have set up plants in the U.S. that provide jobs, even if the profits go overseas.

 

 

Source: Bloomberg