Shares for carmaker companies such as BMW, Volkswagen, and Daimler plummeted. This comes at the heels when President-elect Donald Trump threatened German automakers with a 35 percent border tax for building cars in Mexico and exporting them in the United States.
Volkswagen's shares fell by 2.2 percent, according to Reuters. Meanwhile, BMW dropped to 1.5 percent. Daimler's shares also ended at 1.5 percent.
President-elect Trump particularly singled out BMW. He said that if BMW will sell cars that were built in their Mexico facility, then they will have to pay a 35 percent tariff. According to BBC, the comments released by the US elected president were seen in Germany as a threat to all automotive companies.
Trump criticizes border tax adjustment plan: https://t.co/1A1maOUxwo
— Conor Sen (@conorsen) January 17, 2017
Excerpts of Trump's comments during an interview with a German newspaper, Bild, over the weekend were translated to German and were published on Monday. He further noted that as an advice, car firms should "not to waste their time and money" building facilities in Mexico.
Although it is notable that President-elect Donald Trump is under extreme pressure to make true of the promises he made during his presidential campaign. One of those promises involved providing industrial jobs in the United States.
BMW was not the only carmaker Mr. Trump threatened with a border tax. Japan's Toyota was also warned by the president-elect. A "big border tax" is said to be waiting for the Japanese carmaker if it continues to build Corolla cars in Mexico and market it in the United States.
As for BMW, the company stands firm in pursuing its facility in Mexico, where productions costs are much lower compared with other parts of the US. The San Luis Potosi plant still has a green light and is slated to begin production of the BMW 3-series by 2019.
Meanwhile, the $US1.3 billion production facility near Puebla, Mexico, was inaugurated in 2016 by VW's Audi. They plan to build electric and petrol Q5 SUVs in that specific facility.
Daimler, on the other hand, will begin to assemble Mercedez-Benz units in 2018 in their Mexico facility shared with Renault-Nissan.
All 3 carmakers, VW, BMW, and Daimler, not only have massive facilities in the United States. They also build hundreds, if not thousands, of vehicles for worldwide export in the United States.
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