[050617.EN.BIZ] Trump Threatens German Carmakers With 35pc Import Duty

US President Donald Trump has hit out at German carmakers accusing them of selling too many vehicles in the US, contributing to a lopsided German trade surplus that's hurting the US economy.

"The Germans are bad, very bad," Mr Trump told EU officials in a closed-door meeting, Der Spiegel reported, citing unidentified attendees. "Look at the millions of cars that they sell in the US. Terrible. We're going to stop that."

The US President repeatedly criticised Germany's high trade surplus with the US. In a Bild newspaper interview in January, he threatened luxury-car maker BMW AG with a 35 per cent import duty for foreign-built cars sold in the country.

"If you go down Fifth Avenue everyone has a Mercedes Benz in front of his house," he told Bild, while lamenting the lack of Chevrolets in Germany. General Motors Co has withdrawn the brand from Europe for some years, according to Bloomberg.

German carmakers like Daimler AG, Volkswagen AG and BMW have responded to the attacks with a mix of defiance and mollification.

BMW CEO Harald Krueger, one of a small group of business leaders to accompany German Chancellor Angela Merkel on her first trip to visit Mr Trump at the White House, has defended the importance of free trade and noted that BMW's biggest plant worldwide is in Spartanburg, South Carolina, making the manufacturer the biggest exporter on a net basis from the US.

The German trade surplus rose to a record EUR253 billion (US$284 billion) last year, and the US trade deficit widened in January to the most since March 2012. In addition to drawing Mr Trump's ire, the German imbalance has sparked criticism by European Union leaders including French President Emmanuel Macron.

Source : HKSG.