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Trump-China trade war: Tweet about General Motors and US autos

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Donald Trump
President
Trump is not pleased with General Motors

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  • President Donald Trump again rails against General
    Motors, tweeting that the company’s job cuts and plant closures
    are an exception and “very counter to what other auto companies
    are doing.”
  • But other automakers are also struggling. Ford said it
    will cut jobs, Toyota is threatening to and BMW’s exports have
    slumped. 
  • Rising material costs and export tariffs are hurting
    European and Japanese companies operating in the US as
    well.

US President Donald Trump renewed his attacks on GM Thursday
morning, sending
a tweet
in which he described the firm as “very counter to
what other auto … companies are doing.”

His tweet continued: “Big Steel is opening and renovating
plants all over the country. Auto companies are pouring into the
U.S., including BMW, which just announced a major new plant. The
U.S.A. is booming!”

Not quite.Ford just last month announced
that
it would be forced to lay off employees as it cuts
costs. While Trump could likely claim BMW building a new
plant in the US as a big win, the German company has far from
confirmed any plans, and has also shown signs that the trade war
is actively hurting its business in the USA.

Honda, one of Japan’s largest automakers, has also felt the
pain from Trump’s tariff agenda.
Toyota has also
threatened to cut 1,000 jobs in the USA.

Ford

For Ford, some of the impetus for the layoffs is a restructuring
program the company is undertaking, but the layoffs are also
related to the president’s trade war, with the company citing
recent sales woes in China and increased material costs as
driving some of their pain. 

Ford CEO Jim Hackett told an audience at a Bloomberg
conference that the steel and aluminum tariffs imposed by the
administration 

will
cost the company $1 billion

 in 2018 and
2019.

Honda 

Honda said it was in a similar boat. 
Rick
Schostek, executive vice president for Honda North
America, expressed
concerns
 about the steel tariffs during a Senate Finance
Committee hearing in late September.

So, while we’re paying relatively little in the way of
tariffs on steel, the price of domestic steel has increased as a
result of the tariff, saddling us with hundreds of millions of
dollars in new, unplanned cost,” Schostek said.



Read more:
Volvo’s $30 billion IPO is officially off, and Trump’s trade war
is to blame


It’s a sensitive issue for Trump because the blue-collar workers
in the Rust Belt make up a significant block of his base.

Since General Motors announced on Monday that it will cut 14,000
jobs and idle manufacturing plants in the Midwestern states of
Ohio and Michigan, Trump has had the company squarely in his line
of sight, firing off several tweets attacking the decision of GM
and its CEO Mary Barra.

He also claims to have admonished Barra in person, and said he
told the CEO that she had “better” reopen plants in the US soon.

“Auto companies are pouring into the U.S., including BMW, which
just announced a major new plant.”


BMW South Carolina FactoryREUTERS/Chris Keane

Even BMW’s new plant isn’t as rosy a picture as Trump is
painting:
BMW CEO Harald Krueger said on Tuesday that the German auto giant
is considering building a second plant that would produce engines
and transmissions. 

“We’re at the range where you could think about a second
location,” Krueger said, according to Reuters.

BMW’s US plant, located in Greer, South Carolina,
produces the X3 and X5 models for the German firm
. Both cars
are hugely popular in China, but because of the retaliation of
the Chinese government against US tariffs, are subject to tariffs
of their own. 

Auto exports from the Port of Charleston — where cars made
at the Greer plant are shipped — dived roughly 35% in August
compared to the same month in 2017, according to a report from
the Charleston Post & Courier.

The situation could get worse

The threat of auto tariffs continues to loom large over the car
manufacturing sector. Trump has threatened
to impose 25% tariffs
on all autos and auto parts coming into
the US to extract concessions from trading partners including the
European Union and Canada.

He is yet to follow through on such threats, but earlier this
month it was reported that the
White House was circulating a report discussing the prospect of
auto tariffs
.

Such tariffs,
according to an analysis released by the Peterson Institute for
International Economics in May
, could see production
fall by 1.5% and “cause 195,000 US workers to lose their
jobs over a 1- to 3-year period or possibly longer.”

“The US auto and parts industries would shed 1.9% of their
labor force,” the study added.

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