Trump Wants Mercedes-Benz Off American Streets And He's Playing Hardball

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Berlin has reacted angrily to the US vehicle imports investigation, but the head of Germany's BDI industry association Dieter Kempf on Thursday called for prudence in the growing trade tensions between the European Union and the United States. A spokesperson for the French Embassy declined to comment.

German carmakers voiced dismay at the "incomprehensible" US steel tariffs that took effect Friday, adding to a chorus of criticism from global trade partners over the protectionist move by US President Donald Trump.

German carmakers control 90 percent of the US premium auto market, with BMW (BMWG.DE) owning the Rolls-Royce and BMW brands while Daimler (DAIGn.DE) has Mercedes-Benz and Volkswagen (VOWG_p.DE) controls Bentley, Bugatti, Porsche and Audi.

Tariffs on vehicle imports could be as high as 25 percent, which could lead to clashes within the government. Among automobile manufacturers under attack are Daimler, Porsche, and Volkswagen. Volkswagen controls Bentley, and Bugatti.

Trump plans to ban all German luxury auto imports to the United States, according to German media reports on May 31.

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Germany has touted investments made by its companies in the United States, and their role as major job creators.

Trump and congressional Republicans are preparing to clash over the proposed tariffs, which could be as high as 25 percent. A report from Germany's Wirtschaftswoche magazine cited several unnamed European and U.S. diplomats familiar with these alleged plans, according to Automotive News.

While the imposing of the tariffs is perceived in the United States as a mean of "negotiating" with other counties, those targeted see them as a threat and effectively a declaration of trade war. And the European Union would nearly certainly respond with tariffs on USA autos. The report didn't give any further details on what policies would be used to effectively ban the premium carmakers.

The Bavarian company added that it only imported 30 percent of the steel used at its Spartanburg factory in SC - a 10,000-employee plant that is the company's biggest worldwide.