Monday, June 11, 2018

Trump Cannot Grasp German Car Exports, But Wants to Negotiate Nuclear Weapons


One of the most dangerous things one (or a nation) can is encounter is someone who thinks they are smarter than everyone else, yet in reality is a dim wit and too stupid/narcissistic to recognize their own limitations. Such is the case of Der Trumpenführer, who is about to negotiate on nuclear weapons and North Korean disarmament yet is too stupid and uninformed to even  accurately talk about German car imports/exports figures and trade balance relating thereto. Trump has ranted about the presence of too many Mercedes Benz vehicles in the USA, yet doesn't grasp that nowadays a majority of such vehicles are manufactured in America in red states and that exports of such vehicles exceed imports.  Kim Jong-un is likely having a hard time not laughing out loud to himself as he prepares to meet with a most likely utterly unprepared Der Trumpenführer (Hitler though he knew more than his generals and we all know how that turned out).  A piece in CNN Money looks at how shockingly little Trump knows about German car exports.  Here are story excerpts:
"Sorry, we cannot let our friends, or enemies, take advantage of us on Trade anymore," Trump said on Twitter. "We must put the American worker first!" His complaints about foreign tariffs and trade surpluses are by now familiar. A frequent target is Germany and its car exports. Here are the facts.
 Trump told French President Emmanuel Macron during a recent meeting in Washington that there are too many German cars in the United States. He's also raised the issue with German Chancellor Angela Merkel in the past, and threatened to tax German car imports at 35%.

Economists say Trump is missing two key points: German automakers have opened big factories in the United States, dramatically reducing their need to import cars. Plus, targeting German carmakers would hurt American workers and the US economy.
 German automakers sold 1.35 million vehicles in the United States in 2017, about 8% of total US car sales. Of those, only 494,000 were exported from Germany to the United States — 25% less than in 2013, according to the German carmakers association.

Most of the remainder were made in the United States and in Mexico, . . . Then there are those German car factories in the United States.

BMW (BMWYY)Volkswagen (VLKAF) and Mercedes, which is owned by Daimler (DDAIF), all have major manufacturing plants in the United States and employ nearly 50,000 American workers.

The largest BMW assembly plant in the world is located in Spartanburg, South Carolina. Last year, it posted a new production record of more than 400,000 vehicles — 70% of which were exported to other countries.

Volkswagen has a large factory in Chattanooga, Tennessee, that produced 112,000 vehicles last year. And Mercedes makes 300,000 cars and SUVs a year in Tuscaloosa County, Alabama.

It's a booming business: The total number of cars produced by German automakers in the United States has increased by 180,000 since 2013 to 804,000, according to the German carmakers association. Half are exported to markets including Europe and Asia.
German automakers would most likely scale back investment in the United States if their products were targeted with increased tariffs. And the European Union would almost certainly respond by increasing tariffs on US autos.  Economists say that the focus on tariffs is misplaced.

New trade barriers would mean major problems for the industry at large, which relies on parts supply chains that cross multiple national borders.
"To make a clear cut distinction between what is an American car and what is a German car is in my opinion nonsense," Jacob Kirkegaard, a European trade expert with the Peterson Institute for International Economics, told CNNMoney last month.
If Trump persists in this idiocy, I would hope Mercedes, BMW and Volkswagen would announce plant closures in Alabama, South Carolina and Tennessee and cite Trump and his Republican enablers as the cause of the closures.  Three red states could theoretically swing blue if this happened. Facts do matter to sane Americans and most of the world.  Not so today's Republicans and their idiot base.

As for the North Korea talks, take anything Trump and/or Kim Jong-un says in the aftermath, take it all with many grains of salt.  My money has Kim Jong-un playing Trump for a fool. 

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