USA has been one of the biggest markets for BMW, Daimler & VW and these companies have been building cars in Mexico and exporting it to the US for years. But recently Donald Trump decided to put a 35% border tax on these companies to “encourage” them to start factories in US. Donald is right because his priorities are the US citizens and creating jobs for them. But this Border Tax will hit these companies very hard…
Trump has warned car manufacturers to start making cars in … the US in what he says is an effort to bring back jobs to Americans. A warning of imposing border tax saw shares of the biggest German auto companies – BMW, Daimler and Volkswagen – fall. In an interview to German newspaper Bild, Gabriel said the tax would be detrimental to the Americans. “The American car industry will be worse, weaker and more expensive if Trump were to levy a 35-per cent tax on German cars,” he was quoted as saying. “It doesn’t help to make others weaker, you don’t yourself get stronger by doing that,” he further added.
Even if they were to pay the 35% tax their sales would dwindle in comparison to other local cars… say Tesla and Apple’s EV Titan which is coming soon.
Among these 3… Volkswagen will be the worst hit because it was already reeling in losses… and then it was hit by the diesel-emission-cheating controversy and had to pay a heavy price for that… probably even closing its R&D in diesel. VW were in the process of trying to focus on the Electric Car market… and now Trump suddenly bunker bombed these three companies with border tax.
US being the biggest car market in the world it will be very tough on VW because the asian car markets are not as receptive to the expensive cars of these 3 as much US. This effect could most likely snowball and bring down the curtains on these 3 in the next few years!!!