President-elect Donald Trump threatened German carmaker, BMW, with a border tax for all cars that are manufactured in Mexico and exported to the U.S. market.
BMW is planning to build a new manufacturing plant in Mexico and Trump is threatening to charge BMW 35 percent for any cars that come from that factory to the U.S.
The BMW plant would produce BMW 3 Series beginning in 2019, which are intended for the world market, according to a BMW spokeswoman.
The BMW Group plant in San Luis Potosi would be an addition to the existing 3 Series production facilities in Germany and China.
Trump said that building the plant in the United States would be “much better” for the company.
The BMW spokeswoman said the company is “very much at home in the U.S.,” as it directly and indirectly employs nearly 70,000 people in the country.
Trump also went on to say that Germany was a great car producer, but that there was no reciprocity. He said he was an advocate of free trade, but not at any cost.
Despite the comments from Trump, The German automaker’s head of sales and marketing, Ian Robertson, said he is committed to the factory in Mexico.
Robertson explained that the company needs to expand beyond its factory in the U.S. The factory in Spartanburg, South Carolina, is already the biggest BMW plant in the world.
“We need additional capacity, so we have chosen to build a plant in Mexico,” he said. The Spartanburg plant produces up to 450,000 cars per year, he said.
“In a global setup, this is normal business,” he said. “At the end of the day, our commitment to the U.S. is strong.”
This is not the first automaker to be threatened by Trump. He previously threatened Ford with the same possibility of being charged a border tax.
Earlier this month, Ford scrapped its plans to build a new $1.6 billion plant in Mexico. CEO Mark Fields said the decision was not a special deal made with Trump, rather a decision the company made “independently.”
Trump responded by thanking Ford.
“Thank you to Ford for scrapping a new plant in Mexico and creating 700 new jobs in the U.S. This is just the beginning – much more to follow,” he tweeted.
Thank you to Ford for scrapping a new plant in Mexico and creating 700 new jobs in the U.S. This is just the beginning – much more to follow
— Donald J. Trump (@realDonaldTrump) January 4, 2017
BMW’s new factory would create about 1,500 new jobs. The company has more than 30 factories in 14 countries around the world.