German car makers meet in Washington for talks with the US government. It is much more about self-expression – and a hidden threat.
The planned Meeting with the German car event is bosses, according to Donald trump’s taste. The Show Format is well-known from the TV Show “The Apprentice,” which was moderated by Trump a long time, and was a marvel at the beginning of the year at the world economic forum in Davos.
Since Trump was sitting, and the heads of large corporations are asked in turn to their activities in the United States. Proud as a school boy, and had learned rhymes by heart, reported the commercial arm of billion-investments, new plants and many of the jobs in the United States.
Self-representation
The German car Manager have done their homework. Daimler boss Dieter Zetsche can rave about the Expansion of the plant in Alabama, in which the group inserted an additional billion dollars. Now the site has around 4000 jobs, with the sub-there are 10.000.
Volkswagen-chief Herbert Diess is able to highlight that VW wants to build in the US electric cars and is currently in search of a location. At its plant In Tennessee, the group already employs 3500 people, in the next year, a further 1000 are to be added.
And if BMW CEO Harald Krüger would like, he could tell that his company is planning in the USA, a new engine plant, and also to remind you that BMW’s largest plant in the U.S. state of South Carolina. Around 9000 people are employed here, suppliers will give an additional 12,000 people to work. However, Kruger will not travel to Washington and leaves the presentation of its financial management Board Nicolas Peter.
Together, the Manager can align also greetings from the German industry Association VDA. Overall, says the VDA, deal with German automakers and suppliers in the United States 118,000 employees.
Trump at a Meeting with businessmen in January 2018 in Davos
The outside effect
Trumps the interest in this Meeting is obvious. It should work, thanks to the investment and the Jobs only to him, the great Dealmaker.
The whole event was “nothing more than a pompous Show of Mr. Trump, to produce headlines,” scolds the US Economist Dennis Snower, President, Kiel Institute for the world economy (IfW), in the Handelsblatt. “The group leaders have no Negotiating authority.”
In fact, the German Manager can only shrug their shoulders when it comes to the US point of view, unfair customs duties, which apply in the European Union for imported US cars. On trade and customs issues only the EU is allowed to negotiate Commission.
Also the German Chancellor Angela Merkel on Monday it clear that it could not go at the Meeting to “any trade”.
Relaxation exercise
Nevertheless, the Meeting was not a bad idea, Stefan Kooths, a trade expert at the IfW. “It can’t hurt in any case, if one speaks in Washington,” says Kooths to the DW. It could relax the “relations”, if the Germans and the US make government understandable, “that the Americans are not victims of the auto trade”.
The heads of the German auto maker may want to point out that its US plants, the us trade deficit to reduce. Every fifth car that you build, will be sold to China.
After the G20 summit at the weekend in Buenos Aires, Trump had tweeted that China will reduce its tariffs on U.S. cars from the current 40 percent “and remove”. A confirmation from Beijing is still pending, but the German car bosses will praise for sure, as a step in the right direction.
China is by far the largest single market and it is much more important than the United States, will emphasize the German at the Meeting unnecessarily. Volkswagen sold 44 percent of its cars in the United States, there are only 6.2 percent. Daimler sets 26 percent of all cars in China, BMW’s 24 percent. The US market accounts for 14 percent.
Appease or threaten?
Nevertheless, a horror it would be for the German car industry scenario, should Trump make good on his threat to impose European cars with special duties in the amount of 25 percent.
Currently, a duty of 2.5 per cent is due if European cars are imported into the United States. Are charged, conversely, US-cars in Europe with ten percent. Trump has referred to this repeatedly as unfair. It is different for trucks and Pick-ups. Here an import tariff of 25 percent in the United States, in Europe it is 14 per cent.
Of course, the Germans in Washington could promise, Trumps arguments in Berlin and Brussels. And finally, assert that you would degrade loved one all customs duties.
Because you can change anything, could be the core message of the carmaker, a barely veiled threat: as Long as punitive tariffs threaten of 25 per cent, can be deleted, the planned investments in the United States. Probably will not say so openly, and is only intended to resonate between the lines. But it would be an announcement that also understands the Trump.