Trade squabbles: US Commerce Secretary Wilbur Ross says President Donald Trump feels betrayed by US motor vehicle manufacturers that have threatened to move production outside the US. Picture: REUTERS
Trade squabbles: US Commerce Secretary Wilbur Ross says President Donald Trump feels betrayed by US motor vehicle manufacturers that have threatened to move production outside the US. Picture: REUTERS

Southfield/Washington — BMW is the latest company to urge the US not to impose tariffs on vehicle imports, joining General Motors in pressing its case to US Commerce Secretary Wilbur Ross, even as a top aide to President Donald Trump dismissed the concerns as "smoke and mirrors".

"It seems that the threat to impose these sanctions is designed to achieve certain goals," the newspaper Welt am Sonntag reported, citing a copy of BMW’s letter to Ross.

The Munich-based luxury car maker said that its investment of almost $9bn in the BMW plant at Spartanburg, South Carolina, supported more than 120,000 US jobs.

White House trade adviser Peter Navarro earlier addressed Friday’s stern warning by GM to the Trump administration that it could shrink US operations and cut jobs if tariffs are broadly applied to imported vehicles and automotive parts.

THERE IS A LOT AT STAKE FOR … THE AUTO INDUSTRY AND THE OVERALL ECONOMY.

"Increased import tariffs could lead to a smaller GM, a reduced presence at home and risk less — not more — US jobs," the nation’s largest car maker said in comments submitted on Friday to the commerce department, which Ross leads.

That such a blunt statement came from GM — a company run by CEO Mary Barra, whose normal tack is to avoid the political fray and let trade groups address the president’s policies — was surprising to industry observers. It underscored how high she and many industrial leaders believe the stakes are as the president sinks the US into tit-for-tat trade squabbles across the globe. GM’s public pronouncement follows similar moves by Harley-Davidson, Toyota and Daimler.

The "comment suggests how severe the impact would be to GM, its employees and consumers", said Michelle Krebs, an analyst with AutoTrader.com. "There is a lot at stake for GM, the auto industry and the overall economy."

Navarro shot back at GM on Saturday in an interview on CNN, saying the company was using "smoke and mirrors" to deceive the public. He said the effect of tariffs on the price of a GM car was equivalent to "a luxury floor mat".

"Even the GM cars built here, about half the content is foreign," Navarro said, adding that US factories had become "assembly plants" stitching together components made elsewhere. In the case of BMW’s South Carolina operation, that would be about 1,900 vehicles each day, many of which are exported.

Navarro added that Trump, having passed a tax cut that helped companies like GM and Harley, "felt betrayed" when they then threatened to move production jobs outside the US in response to the retaliatory actions of foreign countries to Trump’s tariffs.

That echoed a tweet from Trump on Wednesday directed at Harley-Davidson: "I’ve done so much for you, and then this."

Trump has ordered an investigation of whether car imports posed national security risks under a section of the same 1960s trade law used to impose levies on steel and aluminium. The administration is said to be considering vehicle tariffs of as much as 25%.

Bloomberg

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