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.


Deal on oil cuts ‘close’ as Saudi Arabia enlists G20

Updated 07 April 2020

Deal on oil cuts ‘close’ as Saudi Arabia enlists G20

  • ‘Virtual’ energy summit on Friday in new effort to stabilize market

DUBAI: Saudi Arabia plans to use its presidency of the powerful G20 group of nations in efforts to restore balance to global oil markets.

The Kingdom is organizing a special meeting of G20 energy ministers — including the other two biggest producers, the US and Russia — to discuss cuts to output.

The “virtual” summit is scheduled for Friday, the day after an OPEC+ meeting of oil producers. Crucially, the US, which is not an OPEC member, will be involved in the G20 summit, energy secretary Dan Brouillette said.

The initiative emerged after a weekend phone call between Prince Abdul Aziz bin Salman, the Saudi energy minister, and Fatih Birol, executive director of the International Energy Agency. The involvement of the G20 is part of the group’s remit, Birol told Arab News on Monday.

“The job description of the G20 is to provide and maintain financial stability, so it is in line with their aims,” he said.

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“The oil industry is going through one of the worst times in its history, and this could have major implications for the global economy, financial markets and employment. Saudi Arabia has been a stabilizing factor in the markets for many years.”

Saudi Arabia and Russia were “very, very close” to a deal to cut oil output, said Kirill Dmitriev, chief executive of the Russian Direct Investment Fund and a close confidant of President Vladimir Putin. An agreement would “bring so much important stability to the market,” he said.

Nevertheless, significant challenges remain. So far, talks between OPEC+ members have focused on a cut of about 10 million barrels per day. This would not be enough to outweigh global market oversupply estimated at more than 20 million barrels, amid a demand slump caused by the coronavirus pandemic.

There are also concerns about whether US producers would be permitted to take part in cuts. American antitrust law prohibits cartel practices, which would rule out a concerted move by its many oil companies.

Some energy experts have suggested that action by the Railroad Commission of Texas, which regulates the energy business in the biggest US oil state, could help limit overall US output.

On the markets, amid the continuing uncertainty, Brent crude was trading about 5 percent down, at just over $32.