President Donald Trump wants to use trade policy to squeeze German carmakers so that there are no Mercedes-Benz models driving down New York City’s Fifth Avenue, according to a German magazine citing unnamed U.S. and European diplomats.
German business and current affairs magazine Wirtschaftswoche reported that President Trump told French President Emmanuel Macron in April that he would push German automakers out of the U.S. market altogether.
Shares of German automakers fell Thursday following the report.
The Trump administration last week launched a Section 232 trade investigation into vehicle imports. Section 232 investigations assess whether imports damage national security. The result could be a 25 percent tariff on foreign-made cars, similar to the result of the Section 232 investigation into steel and aluminum imports.
At that level, tariffs would likely crush imports of German cars. The U.S. market for luxury cars is dominated by German automakers, which account for around 90 percent of luxury car sales.
The European Union imposes a 10 percent tariff on cars imported from the U.S. The U.S. tariff on European made cars is currently 2.5 percent.
TheWirtschaftswoche report did not say what trade barriers Trump planned to use to lock German cars out of the U.S. market.