BMW: German Car Manufacturers Caught in Middle of US-China Trade Row

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Both German car manufacturers BMW and Daimler are under growing pressure to diversify production of their SUVs (sports utility vehicles) outside of the United States as a result of Washington’s growing trade tensions with China.

In addition, Beijing’s proposed 25% tax on US car factory exports will effect approximately 270,000 cars, with German carmakers accounting for USD $7 billion of the USD $11 billion in total.

The largest vehicle exporter from the U.S. in terms of value, BMW, has its biggest factory in Spartanburg, North Carolina and now faces a USD $965 million impact from tariffs, with Daimler exposed to a USD $765 million hit according to sources.

Following this, Spartanburg is where the company makes its X3, X4, X5, X6 and X7 SUVs and with the trade row, it will only add pressure to move production of volume sellers such as the X5 to markets outwith the United States.