BMW to Move US Production to China: More "Winning" Coming, $200B Trump Response

Mike Mish Shedlock

I keep wondering how much more winning we can take. Regardless, more winning is on the way, another $200 billion.

Thanks to Trump's tariffs and China's response BMW Increasing Production in China, in a shift away from the US.

Automaker BMW says it will build more of its popular SUVs overseas to offset the higher cost of sending cars to China due to recently enacted tariffs.

BMW also said it will raise the price of South Carolina-built vehicles sold in China to help offset that country's new 40 percent import tax on cars from the U.S., retaliation for higher tariffs on Chinese goods imposed by President Donald Trump.

BMW builds key SUV models in Spartanburg County, where it employs 10,000 people. Those vehicles are exported to 140 countries, making BMW the largest U.S. auto exporter. Most of the cars made in the Upstate are shipped overseas through the Port of Charleston's Columbus Street Terminal.

BMW and Chinese partner Brilliance Automotive Group Holdings signed an agreement Monday to expand their joint venture, the German automaker said in a news release. The deal will boost the number of cars produced annually at two facilities in China to 520,000 by 2019.

Winning Announcements Stack Up

This winning announcement is fresh on the heels of this Tesla winning announcement: Tesla Production Heads to China: Bull and Bear Case Explained.

Previously, we had this winning announcement: Harley to Shift Some Production Overseas.

On the Harley announcement, I heard analysts say "BMW is far more important and EU production will move to the US."

Something happened to the latter half of that thought.

Forget about that, BMW is clearly more important than Harley. That makes the BMW announcement a bigger Trump "win".

Ka-Blam

8D Chess

Tariff fans say China has more to lose and Trump is playing 3D chess.

Is that 3D or 8D?

I cannot think in eight dimensions. I am dimensionally-challenged.

I must be playing tiddlywinks.

Related Articles

Winning Getting Out of Hand

In case you missed it, Thanks to Trump Tariffs Soybeans Tumble Near 10-Year Low.

This "winning" is getting a bit out of hand. I have lost track of the wins. But I do have a simple question:

How much more winning can we take?

While pondering that simple question, Bloomberg reports U.S. Poised to Publish $200 Billion China Tariff List.

Perhaps it's time to consider my tiddlywinks view: No Matter What Any Other Country Does, the Correct Action is to Reduce Tariffs.

Mike "Mish" Shedlock

Comments (30)
No. 1-30
TheWindowCleaner
TheWindowCleaner

Trump is an idiot who only knows how to bash and dis-integrate intitutions not build them let alone improve them. Then there's the truly integrative individual who is willing and able to take the best aspects of apparently opposing perspectives and create something new and better.

MorrisWR
MorrisWR

I am amazed the Left has to make up stories to attack Trump when he gives them a legitimate reason for attack with his tariff policies. Tariffs not only hurt America but they destroy developing economies by locking them out of foreign markets. Then we send aid to these countries due to poverty which further degrades their markets due to displacement of local manufacturing, agriculture, etc. Tariffs are a lose/lose strategy. Mish is spot on that we should unilaterally remove all tariffs and I have advocated for then stopping all foreign aid (as well as all foreign military engagements). Our country was not founded on protectionist policy but on trade with other countries while not having military engagements. You build good will from trade and not killing people in other countries.

thimk
thimk

looks like made in china 2025 is right on schedule. We should have taken on the chinese with our own free trade zones and small robotics manufacturing plants. Show them we can compete. Tariffs are a short term solution to long term problems.

Realist
Realist

Hi Morris. I am constantly amazed at the ”Left”vs ”Right” talk on this site and in the US overall. Both sides are wasting their time bashing, and hating each other in a horribly unproductive manner. Each side is so concerned with destroying the other, that they would rather harm the country, than work together. Trump is just another example of this stupidity. In order to appeal to his base he must do things that will harm the country. I find it shocking that there is no common sense anymore. But, I guess that’s what happens when you use the ”politics of hate”. The trade war that he is starting, is just one example of this stupidity. Worse, Trump isn’t starting just one trade war with China; he is starting them with Europe, Mexico, Canada, Japan, Korea, Australia, etc. Only an idiot would try to fight multiple wars at the same time. Only an imbecile would think that ”winning” means suffering the least. I feel sorry for Americans. If Trump continues the pursuit of more trade war wins, American workers and consumers will keep losing. But as his supporters frequently say on this site, we will take the suffering today for a better tomorrow. How sad that the suffering today, merely leads to a bleaker tomorrow.

shamrock
shamrock

What authority does Trump have to impose tariffs?

Kinuachdrach
Kinuachdrach

Mish! Mish! Mish! You are letting your bias interfere with your judgment. The article sys nothing about transferring production from the US to China. What the article says is that BMW is going to expand their production in China.

First, that suggests China's mercantilist policy of high tariffs and other pressure to manufacture in China is paying off. Unfortunately, that does not fit with the theoretical benefits of unilateral tariff disarmament.

Second, anyone with real world experience knows that BMW's decision to increase production in China has been under negotiation for months or years. German Board approval processes, etc. It is not a knee-jerk reaction to the US finally fighting back against China's long-running trade war.

Third, one wonders what the long-term impact will be on the cachet of buying a German vehicle for buyers outside China. Eventually BMW will be tempted to export Chinese-made vehicles to the world -- with interesting consequences.

Eighthman
Eighthman

I am horrified by the superficial, nearly brainless response of the left to Trump. They seemed poised to make him look good by contrast - as with more Russophobia, Antifa, pointless protests and threats to government officials.

Democrats owe the nation a well reasoned response as the opposition party, not hysteria. How about healthcare, infrastructure, educational debt....... or are those things too boring for them to care about?

hmk
hmk

Free trade according to theory and advocated by Milton Friedman should benefit all even if as you have pointed out a foreign govt subsidizes industries to sell below cost. I don't necessarily disagree with this. However, the Chinese do much more than this. They are malevolent, engage in extortion of IP, illegal theft of IP, counterfeiting products blatantly all without consequence. The WTO and most nations affected by this have turned a blind eye or the other cheek. ad nauseum. Combine this with China's intent on world domination militarily and politically and with have basically a very evil foe. We are facilitating them in our own demise. I don't necessarily agree with Trumps Captain Chaos negotiating tactics but something should be done and its long overdue. I don't know if the end will justify the means but I have to believe that China and Europe will come to their senses and a favorable trade policy will be put in place.

lol
lol

pay someone a dollar an hour with zero bennies in china,or pay some temp 10 dollars an hour in spartansburg,commies will always win that trade.

Irondoor
Irondoor

I agree with you completely. The world knows what China is up to with its attempt to control the South China Sea. The objective is to create a frontal defensive/offensive position far enough from the mainland that they can conquer Taiwan. Their development of anti-ship missiles and aircraft to deploy them on these islands is another red light signal.

They control N Korea completely and use them as their barking dog to tie us down and they seek to control the Korean peninsula, along with the shipping lanes to Japan. Their Belt/Road project will put most of the ports in South Asia in their control, from which they will attempt to control shipping lanes from the Med to SE Asia. All bought with US dollars.

Additionally, according to some reports, they are bribing government officials in many countries in Africa and also S America to obtain long-term leases on ports and to build resource-mining operations.

All bought and paid for with US dollars. Trump is saying it is time to call their bluff before they gain the military and economic upper hand. The pathetic floundering and pissing away Trillions of US dollars by Bush and Obama and the transfer/theft of technology under Clinton have come home to roost.

TheWindowCleaner
TheWindowCleaner

Very well stated. Trump is a dis-integrationist when integration of economic, monetary and political truths (and simultaneous deletion of their separate or common untruths) is the crying necessity. Unless of course it doesn't matter to you whether there is chaos and war or peace and unperceived servility because you profit either way...which is the case with Finance and its monopolistic paradigm of Debt/Burden/Cost Only...and which I remind posters here, monetary gifting is the only way to end its tyrannical rule.

Cocoa
Cocoa

The Chinese don't allow Google or eBay or Amazon to function in the country. Then China state-sponsors (by law) competitors which have a monopoly. The insiders game the stock price and make out like bandits. Just sayin'

Sechel
Sechel

I believe Trump cares more about how his base is reacting to this than the impact on the GDP and the electorate as a whole

SleemoG
SleemoG

"Our country was not founded on protectionist policy but on trade with other countries while not having military engagements."

Literally the first piece of legislation enacted by the United States was the Tariff Act of 1789. A cursory review of Wikipedia informs us of the Tariff of 1790, Tariff of 1792, Tariff of 1816, Tariff of 1824 (Abominations), Tariff of 1828, Tariff of 1832, Tariff of 1833, Tariff of 1842, The 1846 Walker Tariff, Tariff of 1857, the 1861 Morrill Tariff ... Those are just the Congressional tariffs prior to the Civil War.

The Tariff of 1824 (Abominations) imposed a 38% tax on 92% of imports. It laid half the foundation for Southern secession.

The United States was founded on a principle of trade protectionism in addition to Washington's admonishment to avoid entangling alliances.

SleemoG
SleemoG

National security. Just another way Congress has abdicated its authority to the executive over the years.

Through the Trading With the Enemy Act of 1917, the president can impose a tariff during a time of war. But the country doesn’t need to be at war with a specific country — just generally somewhere where the tariffs would apply. (This is how Richard Nixon imposed a 10 percent tariff in 1971, citing the Korean War.)

The Trade Act of 1974 allows the president to implement a 15 percent tariff for 150 days if there is “an adverse impact on national security from imports.” After 150 days, the trade policy would need congressional approval.

There’s the International Emergency Economic Powers Act of 1977, which would allow the president to implement tariffs during a national emergency.

KidHorn
KidHorn

I hope the dems nominate a reasonable candidate in 2020.

mpowerOR
mpowerOR

This is all NONSENSE.

China will not move US-based production to China, period. BMW may well be increasing production capacity in China, but absolutely not with the intent to export chinese-made vehicles into the US. No way.

This is just a german ploy to bash Trump in a clever & timely manner... you are all being duped.

Bringing chinese-made BMW's into the US would prove more expensive than building them in the US in the first place. This is all bluff & misdirection from BMW/germans... well-timed & well-played, but pure rhetoric nonetheless.

At least BMW/the germans understand Trump & are willing+able to play the game per Trump's own rules... bluff, misdirection & rhetoric. Like Trump himself, this is all just posturing & playground trash talk.

I am amazed that Mish/media/analysts STILL don't understand Trump or his tactics - it's all a show. The real business of the Trump admin. is happening quietly... all the tweets & headlines are for suckers & tourists. Duh.

mpowerOR
mpowerOR

And BTW, Trump is 100% correct about Harley... if they start building bikes outside the US, that's the end of H-D, period. Sales will plummet & never recover.

The US consumer is becoming evermore nationalistic/provincial... "Made in USA" is/will become the barrier for entry/success in the US market... mark my words - the US consumer is slowly but surely changing their tune... willing to pay a little more (or make due with less) to buy the american-made product.

cecilhenry
cecilhenry

How Trump Will Win Against China on Trade

TCW
TCW

No one in the west is going to buy a Bemmer made in China.

mark0f0
mark0f0

They buy everything else "Made in China". Why not a BMW? The computer you're reading this on is probably "Made in China".

Realist
Realist

Are Americans going to stop shopping at ”dollar stores” and Walmart. If so, that might reduce the trade deficit with China substantially. Empower. Harley has been building motorcycles outside of the US for year's. Where have you been, under a rock?

pgp
pgp

Yeah tariffs are stupid but so is media hype and sensationalism. BMW might have moved to China anyway. Why manufacture at point X if the biggest market for your products is at point Y? Companies used to move to China to exploit cheap wages now they do it because China is the last pretense of a global economy offering consumer demand.

TheLege
TheLege

You are wrong. The Beemers made in the U.S. are notoriously poor quality . The vehicles assembled in China have not been without their issues but are improving rapidly. I have a VW that was made in China and it has been trouble-free for 6yrs.

MorrisWR
MorrisWR

It’s not only on this site but others, as well as offline. I hope in the future we can all have a bit more dialogue and not worry so much about our differences. When the economy finally goes into recession, I believe it will only get worse.


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