As President Donald Trump looks into the possibility of placing a 20 percent tariff on car imports from the European Union, German automaker BMW has warned it could be forced to cut production – and jobs – from its South Carolina facility if China and the EU were to further retaliate.
The Trump administration is currently investigating whether auto imports present a national security risk as it weighs potential tariffs.
“The domestic manufacture of automobiles has no apparent correlation with U.S. national security,” BMW wrote in a letter to U.S. Secretary of Commerce Wilbur Ross this week, adding that imposing duties would not increase U.S. growth and competitiveness.
The BMW plant in South Carolina is its largest globally and ships more than 70 percent of its annual production to other export markets, the company said.
Retaliatory tariffs imposed by China after Trump placed duties on Chinese goods already raised BMW’s cost of exporting cars to that country, and additional U.S. tariffs would likely result in further retaliation, BMW said.
Combined with the added expense associated tariffs on imported parts, production plants overseas have a clear advantage.
“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.