Business and and political leaders in South Carolina are pushing for the state’s Spartanburg BMW plant to be exempted from any tariffs the Trump administration places on imports of autos and auto parts imports from Europe, Canada, and Mexico, arguing the plant is a special case because it is the only net exporter in the U.S.
The White House has given no indication whether it would grant the carve-out.
“Close to 70 percent of the BMWs made in South Carolina are made for other markets,” said Ted Pitts, president of the South Carolina Chamber of Commerce. “BMW overall exports about 270,000 units a year out of South Carolina and then they import into the U.S. only about 225,000 units into the country. So they are a net exporter. I would think that any policy that is looking to address automotive manufacturers would look at that first and foremost.”
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He suggested a “one for one” policy in which for every vehicle exported the corporation is credited with one for importing tariff-free. “In a responsible approach like that BMW wouldn’t have tariffs on its vehicle because they are a net exporter,” Pitts explained.
South Carolina Commerce Secretary Bobby Hitt made a similar case Tuesday, telling Automotive News, “Recognizing that BMW’s Spartanburg facility is the only net exporter plant in the U.S. — shipping about 70 percent of its production to more than 120 countries — it should be exempt from tariffs.”
Both have been pushing the state’s congressional delegation to make the case to the administration, but Sanders said he had seen no clear evidence the administration was considering the exemption. Hitt’s office told the Washington Examiner they had not either.
The Trump administration has been weighing the new tariffs on up to 25 percent of automobile and auto part imports, arguing that the position will give it negotiating leverage in talks with its trade partners. That has alarmed the domestic auto industry, who rely on supply chains spread through several countries and face retaliatory tariffs from the trade partners. But it’s a particular problem for the Spartanburg plant.
In a June letter to the Commerce Department, the BMW’s American branch called for special treatment. It stated that in 2017, “As a firm, with respect to trade in finished automobiles, BMW lowered the U.S. trade deficit by more than a billion dollars below what it otherwise would have been. … If the objective of the Section 232 tariffs would be to reduce the trade deficit, we respectfully request that proper consideration is given to the contribution of exporting companies that are already reducing that deficit.”
Commerce Secretary Wilbur Ross said it was “too early” to say whether the administration would go ahead with the tariffs during a public hearing by the department Thursday.
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