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German firms warn US over battery investments in new Trump trade tirade

Tue, 07/24/2018 - 23:48 -- John Shepherd
German firms warn US over battery investments in new Trump trade tirade

German auto firms have indicated they could pull the plug on new investments in battery manufacturing and related facilities in the US if they are forced to pay increased tariffs under a “national security” review.

The warning came after the Trump administration launched an investigation that could pave they way for new tariffs to be slapped on automotive products from Europe, Japan and South Korea.

The US Department of Commerce said the national security probe— under the US Trade Expansion Act of 1962— will consider whether vehicle and parts imports threaten the industry’s health and ability to research and develop new, advanced technologies.

But the president of the German Association of the Automotive Industry (VDA), Bernhard Mattes, told the Department: “Additional tariffs will cut deeply into the tightly-knit net between our companies. They would threaten our ability to export successfully out of the US and call future investment into question.”

German firms have already “invested more than US$30 billion” in the country— with a further US$5bn planned for just the next four years, Mattes said.

And Mattes highlighted Tuscaloosa in Alabama— where Daimler is working on a one million square-foot battery plant— as an example of German investment.

He said South Carolina is also “home to the largest BMW production facility worldwide” and the new Volkswagen manufacturing site in Tennessee supports “well-paid jobs”.

Additional tariffs “will not only harm exports, but undermine competitiveness and strengthen other production locations, with severe negative effects on investment and employment in the US”, Mattes said. “We can either grow together or fall together.”

Meanwhile, South Korea’s Ministry of Trade, Industry and Energy said Korean multinational LG Electronics, which is set to open a battery pack production facility in Michigan this year, was among those protesting at the US probe.

However, an LG Electronics spokesperson told BEST Battery Briefing the new factory would be opening this autumn. “Investments are moving forward, tariffs or no tariffs.”

Details about the new plant’s production capacity and customers are not being made public, the spokesperson said.

The European Union said in a statement the US probe “lacks legitimacy, factual basis and violates international trade rules”.

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