Steel Tariffs Could Crunch Foreign Carmakers In The U.S. South

Mar 17, 2018
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MICHEL MARTIN, HOST:

Another political story we've been following is the president's proposal to impose tariffs on steel and aluminum. We've heard a lot about how U.S. businesses could be affected, but the move also has a number of foreign automakers worried. The southeastern part of the U.S. has seen a big boost in the number of foreign carmakers setting up factories, and these companies are warning that the tariffs could make their cars sold here more expensive and might lead to fewer U.S. jobs. Tasnim Shamma of member station WABE reports.

TASNIM SHAMMA, BYLINE: Mercedes-Benz USA opened its new North American headquarters in Atlanta for more than a thousand employees this week to the tune of violins.

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SHAMMA: It's a fancy corporate building, mostly glass, standing upright with the help of concrete and 1,500 tons of steel. The luxury car company is owned by Daimler, based in Germany. But CEO Dietmar Exler used the grand opening to remind the crowd of the brands U.S. presence.

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DIETMAR EXLER: We are now in the midst of construction of our own factory here in Charleston, S.C. And as you know, the GLE and the GLS are produced in Alabama. Last year, 280,000 cars produced here not just for the U.S. market, but for markets all over the world.

SHAMMA: The German auto industry lobby says German car factories in the U.S. made more than 800,000 vehicles last year, and about half were sold overseas. President Trump signed a proclamation last week to impose a 25 percent tariff on steel from every country except Canada and Mexico. The hope is to boost steel manufacturing in the U.S. Tariffs on steel could hurt companies like Mercedes-Benz, Volkswagen and Porsche says Stefan Mair. He's with The Federation of German Industries and was at the grand opening.

STEFAN MAIR: Do you see the cars outside? There's a lot of steel in there. We think there will be some additional percentage points on the prices of cars.

SHAMMA: That price increase could be enough to stop people from buying new cars says Lisa Cook. She teaches economics and international relations at Michigan State University.

LISA COOK: If consumers are price sensitive, and they are for many types of cars, this could cause people to postpone their decision to purchase a car.

SHAMMA: A German business group says a little more than a quarter of all U.S. steel is used to make cars in this country. And making cars more expensive to build and export could hurt American jobs says Jeffrey Rosensweig. He teaches international business at Emory University in Atlanta.

JEFFREY ROSENSWEIG: That would not only cost us jobs, it would hurt the U.S. and could potentially harm the U.S. trade balance, just the opposite of what President Trump thinks he's trying to achieve.

SHAMMA: He says the steel tariffs could trigger a trade war that would go beyond the auto industry.

ROSENSWEIG: These foreign nations that we're going to put these import taxes on, these tariffs, are not stupid. They're going to retaliate against our exports, and they're going to hit us where it hurts, which is often our farm exports.

SHAMMA: And in trade wars, he says, everyone loses. For NPR News, I'm Tasnim Shamma in Atlanta.

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