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BMW Named Top U.S. Auto Exporter as President Trump Threatens Higher Tariffs on EU Imports

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【Summary】German automaker BMW was named as the largest exporter by value of new vehicles in the U.S. for the fifth consecutive year. BMW said that exports totaled over $8.4 billion in 2018, yet the automaker remains a target for higher tariffs from the Trump administration.

Eric Walz    Mar 08, 2019 2:56 PM PT
BMW Named Top U.S. Auto Exporter as President Trump Threatens Higher Tariffs on EU Imports
A BMW SUV painted with an American flag parked outside of the BMW Spartanburg visitors center.

Surprisingly, the biggest U.S. exporter of motor vehicles by value is not one of the "big three" U.S. automakers General Motors, Ford and Chrysler, it's German carmaker BMW. The luxury automaker has been named as the largest exporter by value of new vehicles for the fifth consecutive year.

BMW AG said on Friday that exports totaled over $8.4 billion in 2018, yet the automaker remains a target of higher tariffs imposed by the Trump administration.

BMW currently builds all of its X SUV models in the U.S. at its sprawling Spartanburg, South Carolina assembly plant. These models include the X3, X4, X5, X6 and X7 SUVs. The plant also built the Z4 roadster from 2002 to 2008.

The company said it exported 234,689 units of its X model sport utility vehicles and coupes from the Spartanburg plant during 2018. While BMW, Mercedes-Benz and Volkswagen exported a total of 494,000 cars from Germany to the U.S. in 2017, or 45 percent of all European auto exports to America.

At $28.6 billion, Germany accounted for 55 percent of the value of all European cars sold to the U.S. that same year, according to research gathered by the Geneva, Switzerland-based Pictet Group.

BMW, along with rivals Mercedes Benz and Audi are frequent targets of the Trump administration, with the President threatening to slap tariffs on luxury vehicles imported from Europe, claiming they put U.S.-based automakers at a disadvantage.

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The 2019 BMW X3 is built in the U.S. at the automaker's Spartanburg assembly plant.

President Trump Seeking Higher Tariffs on EU Auto Imports

The tariffs on autos imported from Europe to the U.S. are currently 2.5 percent, while the EU slaps a 10 percent tariff on American imports. President Trump has threatened to increase this tariff to 25 percent on EU imports, citing a national security risk.

Last month, CNBC reported that a confidential U.S. Commerce Department report was sent to Trump clearing the way for him to threaten tariffs of up to 25 percent on imported autos and auto parts by designating them as national security threat.

However, President Trump has promised European Commission President Jean-Claude Juncker that he will not impose additional import tariffs on European cars for the time being, Juncker was quoted as saying in a published interview on Feb 18.

"Trump gave me his word that there won't be any car tariffs for the time being. I view this commitment as something you can rely on," Juncker told the German daily Stuttgarter Zeitung in an interview. However, he did not specify when Trump made the promise.

Automakers have warned that higher tariff on imported cars and auto parts would add thousands of dollars to vehicle costs and potentially devastate the U.S. economy as auto companies cut jobs to maintain profits.

BMW's U.S. Factory Provides a Big Boost to the Local Economy

BMW's Spartanburg assembly plant provides a massive boost to the local economy and BMW is a major employer in the Spartanburg region. 1 out of every 10 jobs in the region is related to autos and parts. The Spartanburg plant is also BMW's largest in the world.

"The remarkable partnership between BMW and South Carolina continues to thrive, and this is evident by the fact that our state remains the nation's leader in the export sales of completed passenger vehicles," South Carolina Secretary of Commerce Bobby Hitt said.

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A BMW employee performs a final inspection of a X7 and the Spartanburg, South Carolina assembly plant.

People living in the area say that President Trump is threatening the town's livelihood with the threat of higher tariffs and unfairly targeting luxury imports that are popular with American consumers.

"BMW saved Spartanburg and transformed South Carolina into a manufacturing mecca to the world," David Britt, a member of the County Council said in an interview with the New York Times in July 2018. "When you mess with the golden goose, they're family, and you're messing with me."

BMW has been manufacturing cars in the United States since 1994. BMW's investment in South Carolina supports over 28,000 jobs, about 1.6 percent of the statewide workforce. The automaker's plant in South Carolina employs around 9,000 people.

"Despite the ongoing uncertainty regarding trade and tariffs, plant Spartanburg is still positively contributing to the U.S. balance of trade," said Knudt Flor, president and CEO of BMW Manufacturing Co LLC.

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