Despite the customs war, Porsche rejects “Made in USA”

manager24.pl 3 days ago

German sports car maker Porsche has for now resigned production in the US. The company is very pleased with the current origin of its vehicles, said Timo Resch, CEO for North America, in an interview with the paper “Handelsblatt” . This is despite export costs, which have increased due to the unclear tariff policy of president Trump. "There are no direct or concrete plans to enter local production," Resch said. Rumors of this kind in Porsche have been circulating all summer.

When asked for another options, specified as production in the existing VW subsidiary plant or the assembly of finished parts in the US, Resch replied, “From our perspective, Porsche has no circumstantial plans and there is no request to implement them immediately”. This is besides due to the fact that Porsche production volumes are importantly lower than for example Audi. "This is another reason why local production is presently not cost-effective".

The duties imposed by Trump on the import of cars importantly increase the cost of selling German cars in the USA to producers. There is inactive an obsolete work rate of 27.5%. However, it is to be reduced retroactively to 15% from 1 August – inactive more than before the trade conflict. Resch did not uncover how many duties would cost car manufacturers, but stated that it would be a ‘significant amount’.

Industry experts anticipate German car manufacturers to decision production to the US in the average term. However, these issues are subject to considerable uncertainty due to the fact that president Trump does not feel permanently bound by agreements that have already been announced.

He has just announced fresh duties as a punishment for the antitrust fine imposed by the European Commission on Google this Friday. It is not clear what duties may be imposed. Trump's reaction is surprising, especially since his own administration besides takes action against Google's business practices.

Lack of planning safety for US trading partners

Such uncertainty is peculiarly burdensome for trade relations with the United States. This is surely 1 of the reasons why the Porsche manager, Resch, is pressing for the swift implementation of the EU-United States trade agreement. It is besides essential to "get binding power and thus guarantee the safety of planning for importing vehicles from the US," Resch said.

So far, its company has managed to "keep prices unchangeable to any extent," Resch says. But it is now crucial that the agreement between the EU and the US yet comes into force. The current 27.5% rate of work for vehicles and spare parts is "not sustainable, neither reasonable, nor for Porsche nor manufacture as a whole".

According to the political agreement, from August it is to be reduced retroactively to 15 percent. As long as it stays that way.

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