SAVANNAH, Ga. (AP) — Donald Trump on Tuesday pledged to stop U.S. businesses from shipping jobs overseas and to take other countries’ jobs and factories by relying heavily on sweeping tariffs to boost auto manufacturing — despite warnings that domestic consumers would pay more and a lack of specifics about how his plans would work.
“I want German car companies to become American car companies. I want them to build their plants here,” Trump declared during a speech in Savannah, Georgia.
Trump added that, if elected, he’d put a 100% tariff on every car imported from Mexico and that the only way to avoid those charges would be for an automaker to build the cars in the U.S.
His ideas, if enacted, could cause a huge upheaval in the American auto industry. Many automakers now build smaller, lower-priced vehicles in Mexico — facilitated by a trade agreement Trump negotiated while president — or in other countries because their profit margins are slim. The lower labor costs help the companies make money on those vehicles.
German and other foreign automakers already have extensive manufacturing operations in the U.S., and many now build more vehicles here than they send. BMW, for instance, has an 8 million-square-foot campus in South Carolina that employs 11,000 people building more than 1,500 SUVs per day for the U.S. and 120 export markets. Mercedes and Volkswagen also have large factories here.
If German automakers were to increase production here, they likely would have to take it from factories in Germany, which then would run below their capacity and be less efficient, said Sam Abuelsamid, principal research analyst for Guidehouse Insights. “It makes no sense,” he said.