Shares in German automakers BMW, Daimler and Volkswagen dropped after United States President-elect Donald Trump alerted he will enforce a border tax of 35 percent on automobiles imported from abroad to the U.S. market.
All 3 automakers have invested greatly in factories in Mexico, where production costs are lower than the United States, having a target of exporting smaller vehicles to the United States market.
During an interview with German newspaper Bild, published on Monday, Trump criticized the German automakers 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 stated.
“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 stated, including that automakers will rather have to build plants in the United States.
Mercedes-Benz and BMW already have significant factories in the United States where they develop higher-margin sports utility vehicles (SUVs).
BMW shares dropped 0.85 percent, shares in Daimler lowered 1.54 percent and Volkswagen shares were trading 1.07 percent reduced in early trading in Frankfurt.