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Trump threatens German carmakers with 35 pct US import tariff

Trump threatens German carmakers with 35 pct US import tariff

FRANKFURT, Jan 16 (Reuters) Shares in German carmakers BMW , Daimler and Volkswagen fell after United States President-elect Donald Trump warned he will impose a border tax of 35 percent on vehicles imported from abroad to the U.S. market. All three carmakers have invested heavily in factories in Mexico, where production costs are lower than the United States, with an eye to exporting smaller vehicles to the U.S. market. In an interview with German newspaper Bild, published on Monday, Trump sharply criticised the German carmakers for failing to produce more cars on U.S. soil. "If you want to build cars in the world, then I wish you all the best. You can build cars for the United States, but for every car that comes to the USA, you will pay 35 percent tax," Trump said in remarks that were translated into German. "I would tell BMW that if you are building a factory in Mexico and plan to sell cars to the USA, without a 35 percent tax, then you can forget that," Trump said, adding that carmakers will instead have to build plants in the United States. Mercedes-Benz and BMW already have sizeable factories in the United States where they build higher-margin sports utility vehicles (SUVs). BMW shares were down 0.85 percent, shares in Daimler were 1.54 percent lower and Volkswagen shares were trading 1.07 percent lower shortly in early trading in Frankfurt. A BMW spokeswoman said a BMW Group plant in the central Mexican city of San Luis Potosi would build the BMW 3 Series starting from 2019, with the output intended for the world market. The plant in Mexico would be an addition to existing 3 Series production facilities in Germany and China. In June last year, BMW broke ground on the plant, pledging to invest
2.2 billion in Mexico by 2019 for annual production of 150,000 cars. Daimler has said it plans to begin assembling Mercedes-Benz vehicles in 2018 from a
1 billion facility shared with Renault-Nissan in Aguascalientes in Mexico. Daimler was not immediately available for comment. Last year VW's Audi division inaugurated a

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