BMW says US tariffs on EU cars may hit its investment there

The BMW badge on the bonnet of a 1963 BMW Isetta 300 during a media tour of the Fullerton Concours d'Elegance in Singapore June 29, 2018. (REUTERS/Loriene Perera)
Updated 30 June 2018

BMW says US tariffs on EU cars may hit its investment there

  • President Trump’s administration last month launched an investigation into whether auto imports posed a national security threat
  • The BMW plant in South Carolina is its largest globally and ships more than 70 percent of its annual production to other export markets

BERLIN: US tariffs on imported cars could lead BMW to reduce investment and cut jobs in the United States due to the large number of cars it exports from its South Caroline plant, the German carmaker has warned.
President Trump’s administration last month launched an investigation into whether auto imports posed a national security threat and Trump has threatened to impose a 20 percent tariff on all imports of EU-assembled cars.
“The domestic manufacture of automobiles has no apparent correlation with US national security,” BMW wrote in a letter to US Secretary of Commerce Wilbur Ross this week, adding that imposing duties would not increase US growth and competitiveness.
The BMW plant in South Carolina is its largest globally and ships more than 70 percent of its annual production to other export markets, the company said.
Chinese tariffs on US passenger cars, imposed in retaliation for US duties on Chinese goods, have already hiked up the cost of exporting to China, BMW said. Any US tariffs would likely lead to further retaliatory measures from China and the European Union.
In addition, higher tariffs on components imported to the United States would make other production locations outside the country more competitive.
“All of these factors would substantially increase the costs of exporting passenger cars to these markets from the United States and deteriorate the market access for BMW in these jurisdictions, potentially leading to strongly reduced export volumes and negative effects on investment and employment in the United States,” BMW said in the letter.
Two major auto trade groups, one representing BMW among others, had earlier this week said that imposing up to 25 percent tariffs on imported vehicles would cost hundreds of thousands of jobs, dramatically hike prices on vehicles and threaten industry spending on self-driving cars.
“By insulating the United States from foreign competition, there is less incentive for American companies to strive to raise their productivity and look for ways and means of producing ever better goods (and services) ever more cheaply,” BMW said.


Saudi Arabia raises more than SR15bn in bond sale

Updated 28 March 2020

Saudi Arabia raises more than SR15bn in bond sale

  • Gulf oil exporters are increasingly turning to debt sales to help fund spending in a low oil price environment

JEDDAH: Saudi Arabia has sold more than SR15 billion in Islamic bonds, as the Kingdom seeks to develop its local debt market.

The Kingdom’s Finance Ministry said on Friday that it had closed the book to investors on its March 2020 riyal-denominated sukuk program.

The total amount raised by the sukuk sale was SR15.568 billion, divided into three tranches that mature in five, 10 and 30 years.

Gulf oil exporters are increasingly turning to debt sales to help fund spending in a low oil price environment while at the same time developing their own capital markets as part of ongoing diversification reforms.

“The closure of the issuance of government bonds exceeding 15 billion riyals shows many positive elements,” said Abdullah Ahmad Al-Maghlouth, a member of the Saudi Economic Society. 

“Such as confirming the robustness of the Kingdom’s credit rating and the strength of the Saudi economy; that the Kingdom’s debt-to-GDP ratio is still far lower than many other G20 countries; the Finance Ministry’s ability to deal with the requirements of asset and liability management; as well as the Kingdom’s strong foreign-exchange reserves in dollars, among others.”

The Kingdom’s strong credit rating means it can borrow more cheaply than many other Mideast economies despite a weaker oil price.

Economic analyst Fahd Al-Thunayan said: “The Ministry of Finance, represented by the National Debt Management Center, continued its efforts in developing local debt markets and providing the required balance in financing public-budget expenditures, through the optimal mixture of the use of reserves and borrowing within the upper limits, like a percentage of the GDP, where the local issuances reached 65 percent of the total debt in the year 2019.”