BMW warns officials: Tariffs on European cars could cut US production

BMW has reportedly warned federal officials that U.S. tariffs on European auto imports would raise its cost of doing business in the country and potentially force it to cut production at its Spartanburg, S.C., plant. 

Reuters reported over the weekend that the automaker is growing concerned about President Trump’s threat to place a 20 percent tariff on all European cars entering the United States. The German company aired its concerns in a letter it sent to Commerce Secretary Wilbur Ross last week. 

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“The domestic manufacture of automobiles has no apparent correlation with U.S. national security,” BMW wrote. The German car manufacturer added that imposing duties would not increase U.S. growth and competitiveness.

The BMW plant in South Carolina is the company’s largest in the world, and it ships more than 70 percent of its annual production to other export markets. 

The Reuters report notes that China’s tariffs against the U.S., imposed in retaliation to Trump’s enforcement of duties on Chinese goods, have already negatively affected BMW. The company said that the tariffs have increased the cost of exporting to China. 

“All of these factors would substantially increase the costs of exporting passenger cars to these markets from the United States and deteriorate the market access for BMW in these jurisdictions, potentially leading to strongly reduced export volumes and negative effects on investment and employment in the United States,” BMW said in the letter.

Two major auto groups last week said that imposing up to 25 percent tariffs on imported vehicles would eliminate hundreds of thousands of jobs, according to Reuters. The news outlet adds that the groups claim that it would dramatically increase vehicle prices and effect industry spending on self-driving cars.