Former President Donald Trump’s “America First” trade policy frequently targeted the automotive industry, reflecting his stated desire to see fewer European cars on American roads and more American cars purchased by Europeans. His administration threatened tariffs on EU car imports, sparking concerns of a trade war and causing predictable market reactions, with European automaker shares experiencing significant declines. Underlying these trade disputes was Trump’s apparent fixation on German cars, exemplified by reported comments to French President Emmanuel Macron expressing his disapproval of Mercedes-Benz vehicles in New York City and questioning the disparity between German purchases of Chevrolets and American purchases of BMWs. This “obsession,” as former German Chancellor Angela Merkel termed it, seems paradoxical given that many of the German cars seen in the US are actually manufactured in American factories.
The irony of Trump’s stance lies in the significant presence of European, particularly German, automakers in the United States. Major players like BMW, Volkswagen, and Mercedes-Benz operate large production plants within the US, employing thousands of American workers and contributing substantially to the US economy. These plants produce vehicles tailored to the American market, blurring the lines between “American” and “foreign” cars. Trump’s demands that overseas auto companies manufacture in the US seemingly ignored the decades-long history of European car production on American soil. The substantial investments made by these companies, such as Volkswagen’s $10 billion investment split between its Chattanooga plant and a joint venture with Rivian, further underscore their commitment to the US market. BMW’s South Carolina plant, the largest BMW assembly plant globally, stands as a testament to the success of this international integration.
The interwoven nature of the global automotive industry further complicates the “us vs. them” narrative promoted by Trump. The “Big Three” American automakers – GM, Ford, and Chrysler – are no longer purely American entities. Chrysler, for example, became part of the Italian Fiat group and subsequently the Amsterdam-based Stellantis, which also owns iconic American brands like Dodge, Jeep, and Ram Trucks. This international commingling of brands highlights the difficulty in defining a car’s nationality based solely on the brand name.
Trump’s focus on trade deficits and his desire to boost American manufacturing, while understandable goals, overlooked the complexities of globalized production and the existing contributions of European automakers to the US economy. The tariffs he threatened would likely have negative repercussions for both American consumers and the American automotive industry, impacting jobs and potentially raising prices. Experts, like Jacob Kirkegaard of the Peterson Institute for International Economics, have pointed out the absurdity of trying to distinguish between “American” and “German” cars in this interconnected market, highlighting the integrated supply chains and shared manufacturing processes.
Furthermore, the success of European automakers in the US is a testament to consumer demand and market forces. American consumers choose to buy European cars for various reasons, including perceived quality, performance, and brand prestige. Restricting consumer choice through tariffs would interfere with these market dynamics and potentially harm the very industries Trump sought to protect. The thriving European auto plants in “Trump-voting states,” employing tens of thousands of Americans, underscore the economic benefits of this international trade and investment.
In conclusion, Trump’s approach to the automotive industry reflected a simplified view of international trade that disregarded the intricate realities of globalized manufacturing. His focus on tariffs and restricting imports, driven by a desire to boost American car sales and reduce trade deficits, failed to acknowledge the substantial presence and economic contributions of European automakers in the US. The interconnected nature of the global automotive industry, exemplified by the international ownership of brands and the integrated supply chains, renders the concept of a purely “American” or “European” car increasingly obsolete. Trump’s policies, while intended to promote American interests, risked disrupting a complex and mutually beneficial system, potentially harming both American consumers and the American automotive industry in the process.
