Photographer: Michael Noble Jr./Bloomberg

German Carmakers Are Sitting Ducks in U.S.-China Trade Fight

  • BMW, Daimler import most vehicles into China from the U.S.
  • Evercore: ‘Prime example of the unintended consequences’

China’s threat to retaliate against U.S. tariffs by socking American car imports with an additional 25 percent fee would have a bigger impact on Germany’s Daimler AG and BMW AG than on Detroit automakers, according to analysts at Evercore ISI.

“This is essentially a tax on southern German auto, specifically BMW and Mercedes SUVs, which are built in the U.S. and exported to China,” said Arndt Ellinghorst, an analyst with Evercore ISI.

While Elon Musk’s Tesla will be hard hit, other U.S. automakers have already shifted production to China, and export far fewer cars to the world’s biggest market. Volkswagen AG too makes most of its Chinese-sold cars locally. BMW, which has a plant in Spartanburg, South Carolina, and Mercedes-Benz maker Daimler will ship just over 100,000 vehicles to China from the U.S. this year, Evercore estimates -- almost $7 billion worth of goods.

Biggest Losers

Daimler and BMW import more vehicles to China from the U.S. than American carmakers

Source: Evercore ISI

“This is a prime example of the unintended consequences of a trade war,” Ellinghorst wrote in a note. “Global trade, especially in the auto industry, is a system that has grown over decades and abrupt distortions can have meaningful negative implications.”

— With assistance by Tommaso Ebhardt

    Before it's here, it's on the Bloomberg Terminal. LEARN MORE