Mercedes-Benz (MBGAF) is gearing up for the Trump trade war by battening down the hatches on costs and boosting EV and hybrid innovations after a challenging year.
But its CEO Ola Källenius has a message to the Trump administration: don’t forget how much we have invested in the US.
At close: February 19 at 3:00:00 PM EST
“We’re also an American company. Yes, we have our headquarters in Germany and we have European origins, but we feel American. I myself have spent six years of my Mercedes career in the United States too. My children are born in the United States. I feel deeply, deeply connected to the US,” Källenius responded on a video call with reporters Thursday, addressing how the company plans to handle potential tariffs.
Added Källenius, “We are prepared to continue to invest billions, and we want to grow our footprint in the United States. So we are committed. A little known fact, we are one of the major industrial exporters out of the United States. Two thirds of the vehicles that we make in our Tuscaloosa plant actually go out into the world, a significant part of them, obviously, to Europe.”
The auto industry may get upended as president Trump looks to implement tariffs.
On Tuesday, the president floated automotive tariffs of 25% — which could hammer US automakers like General Motors (GM) and Ford (FORD) and overseas rivals Mercedes-Benz.
At close: February 19 at 4:00:02 PM EST
Out of the 374,000 vehicles that Mercedes-Benz sold in the US last year more than half were imported, according to the company. About 13% of German car exports head to the United States, more than to any other country according to new data from German auto association VDA.
“Tariffs are the wrong negotiating tool,” VDA president Hildegard Müller said in a statement this week.
The administration has already levied a 25% tariff on all imported steel and a 10% tariff on Chinese imports on top of existing duties. China retaliated, placing tariffs on select chips and metals.
Trump recently agreed to pause 25% tariffs on Canada and Mexico until early March.
Auto leaders have begun to speak out publicly on the tariff issue as they seek to sway Trump’s opinion on their usefulness to the US economy and businesses.
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“If they become permanent, then there’s a whole bunch of different things that you have to think about in terms of, where do you allocate plants, and do you move plants, etc.,” GM CFO Paul Jacobson said at an investor conference on Wednesday.
“Those are questions that just don’t have an answer today, because I can tell you, as much as the market is pricing in a big impact of tariffs and lost profitability, think about a world where, on top of that, we’re spending billions of capital, and then it ends.”