[Source/Observer Network, Pan Yuchun; Editor/Gao Shen] To avoid potential losses of up to $11 million USD (approximately RMB 79.19 million) per day, the leading German automaker is considering reaching an agreement with U.S. President Trump.

According to reports from Germany's Handelsblatt, Reuters, and other media outlets, the three major German automakers, BMW, Mercedes-Benz, and Volkswagen, are in negotiations with the U.S. regarding tariff agreements.

Trump's tariffs pose a significant threat to the Big Three German automakers - Carscoops

Three sources familiar with the matter said that the Big Three German automakers are seeking to use their investments and exports in the U.S. as leverage to mitigate the impact of Trump's tariffs, which could cost them up to $11 million USD per day.

One source said that Volkswagen hopes to reach an agreement with the U.S. Department of Commerce by June, but this will depend on the company's commitment to investing in the U.S.

Another source said that German automakers are discussing a proposal to obtain credits for cars exported to the U.S., which would offset part of the tariff costs.

In response, BMW, Mercedes-Benz, and Volkswagen declined to comment on any negotiations with the U.S. government, only stating that they are in talks with the U.S. government regarding tariffs.

In order to compromise, German companies are increasing their investments in the U.S.

Since April this year, the U.S. has imposed a 25% tariff on all imported vehicles; in early May, it also imposed a 25% tariff on imported components; on May 23, Trump threatened to impose a 50% tariff on all EU imports starting June, but after speaking with European Commission President Ursula von der Leyen, he postponed the tariff until July 9 to allow both sides to negotiate an agreement.

Since Trump issued his tariff threats, German automakers have disclosed some plans to expand in the U.S. For example, Mercedes-Benz plans to increase production of its best-selling SUV model, the GLC, at the Tuscaloosa plant starting in 2027 and export it to many countries; BMW is considering adding shifts at its Spartanburg plant; Audi also plans to produce some models in the U.S., although Volkswagen claims this plan predates Trump's presidency.

Specifically, BMW, Mercedes-Benz, and Volkswagen all have automotive production plants in the U.S., dating back to the 1990s, with the latest having over a decade of production history.

BWM's production line in the U.S. - BMW

Among these, the Tuscaloosa plant of Mercedes-Benz employs approximately 6,000 workers and has cumulatively produced about 4 million vehicles. Currently, the plant produces GLE, GLS, EQE SUV, and EQS SUV models, with last year's production reaching around 260,000 units.

The Spartanburg plant of BMW employs approximately 11,000 people locally and has cumulatively produced more than 7 million vehicles. Last year alone, the plant produced nearly 400,000 vehicles, of which approximately 225,000 were exported to 120 countries worldwide.

The Chattanooga plant of Volkswagen employs about 4,500 people and produces Atlas, Atlas Cross Sport, and ID.4 models, with an annual production capacity of approximately 175,000 vehicles. The company also emphasized that the average annual salary of its employees exceeds $60,000 USD (approximately RMB 432,000), higher than the median household income in the region.

Reconciliation or Retaliation?

In addition, BMW urged the EU to reduce the tariff on U.S. vehicle imports from 10% to 2.5% to facilitate an agreement between both parties.

According to EU data, the U.S. is the fifth largest source of car imports for the EU, after China, Japan, the UK, and Turkey.

Currently, the European Commission is intensifying negotiations with the U.S. to ensure an agreement with Washington to terminate import tariffs on EU goods or at least prevent further increases in U.S. rates.

U.S. President Trump - White House

Moreover, the European Commission has requested detailed information about the U.S. investment plans of major EU companies and their CEOs as a bargaining chip in the negotiations.

Nevertheless, if negotiations fail, the European Commission is preparing for retaliation. On May 8, the European Commission released a list of countermeasures against U.S. tariffs, stating that in the event of a breakdown in negotiations, retaliatory tariffs would be imposed on total EU imports worth €95 billion (approximately RMB 770 billion), with automobiles and automotive parts being among the highest-valued items on the countermeasure list.

This article is an exclusive contribution from Observer Network and cannot be reprinted without permission.

Original Source: https://www.toutiao.com/article/7509753502659248678/

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