It is one of the tantalising ironies of the trade war between the US and China: German carmakers BMW and Daimler could end up as the biggest losers.
After decades of investing in American states that back Donald Trump’s Republican party, the US’s two largest car exporters by value are likely to be hurt most.
If China goes through with its threat to retaliate against the US president’s policies, sport utility vehicles built by BMW in South Carolina and Daimler-owned Mercedes in Alabama will be subject to onerous 40 per cent tariffs from July 6.
By contrast, the main US carmakers will see little impact from rising tariffs in China.
The Beijing market is extremely important to both Ford and General Motors, but the vast majority of their Chinese-sold vehicles are already produced locally. Both companies have thriving joint ventures with Chinese companies that meet most of the market demand for their vehicles.
Adding to the complexity of trade war repercussions, Daimler and BMW’s German rivals Porsche and Audi could be major beneficiaries as vehicles exported from Europe will face levies of just 15 per cent.
