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German car bosses optimistic after meeting Trump

December 4, 2018

Top executives from Volkswagen, Daimler and BMW met with US President Donald Trump seeking to stave off pending tariffs on automobile imports. The German bosses promised to invest more in the US.

Volkswagen chief Herbert Diess speaks to reporters in Washington
Image: picture-alliance/AP/E. Vucci

The heads of Germany's three largest carmakers met with US President Donald Trump on Tuesday, in an effort to resolve the impasse that has led to looming 25 percent auto tariffs.  

The White House has claimed that American manufacturers are treated unfairly by the Europeans and Trump said he seeks "reciprocal" trade deals to help protect and grow US manufacturing jobs.

Commerce Secretary Wilbur Ross said the aim of the talks was to pare down the $30 billion (€26.5 billion) trade deficit the US has with Germany in cars and auto parts, which comprises of half the $66 billion total US deficit with the EU.

"We made a big step forward to avoid the tariffs," Volkswagen chief Herbert Diess said after the meeting.

Daimler chairman Dieter Zetsche echoed the sentiment, saying that the "implicit potential threat" of new tariffs had been reduced after the talks.

White House spokeswoman Lindsay Walters said after the meeting that Trump "shared his vision of all automakers producing in the United States and creating a more friendly business environment."

Balancing act

DW's financial correspondent in New York, Jens Korte, said Washington was looking to put pressure on Germany, as Europe's biggest economy, to steer trade talks with the EU. The German executives, on the other hand, were there to "convince Trump how important the German car industry is for the US economy."

The visit did not go down well in Brussels, however: EU Trade Commissioner Cecilia Malmström is the person responsible for conducting trade talks between Europe and the US.

The executives rejected fears their trip would endanger negotiations and that they had planned the meeting at the White House in consultation with both Brussels and Berlin.

Read more: Does the world still love German cars?

German carmakers welcome US-Mexico deal

Increased US investment

White House economic adviser Larry Kudlow also said the goal was to encourage German automakers to invest more and manufacture more in the United States.

"The president has a point," Diess said, adding that US officials "tried to convince us to invest more into America and we are prepared to do this."

Read more: Why higher US tariffs on car imports would backfire

Volkswagen is in talks with the Ford Motor Company about a partnership to build VW vehicles at some of Ford's US factories.

VW is also considering the possible construction of an electric vehicles plant in the US. 

Daimler chairman Zetsche told reporters that to increase US investments, current conditions must remain unchanged.

BMW  described itself as a committed "local player" with a plant in Spartanburg, South Carolina, that employs nearly 10,000 people. Last week, the company said it was considering building a second manufacturing plant in the United States to produce engines and transmissions. The decision, however, has not been finalized.

jcg/rt (dpa, reuters)

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