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Tue May 30, 2017, 05:10 PM May 2017

Driving Under the Influence of Trump - WSJ Editorial (5/27)

Trump can’t seem to stop himself from popping off on trade, but can he at least do a little homework? The German newspaper Der Spiegel reported this week that Mr. Trump called out German car makers in a meeting with EU leaders in Brussels. “Look at the millions of cars that they sell in the U.S. Terrible. We’re going to stop that,” ostensibly through tariffs. The White House has not denied the report.

Some basic facts: Last year BMW produced more than 400,000 cars at its $7 billion plant in . . . South Carolina. About 70% of the cars were exported, which makes BMW the top automotive exporter in the U.S. Last year a Mercedes plant in Alabama made 300,000 cars. Foreign-based auto makers (including Toyota, Mitsubishi and others) produced 5.5 million cars in America last year and have invested $75 billion in U.S. operations.

That translates to thousands of jobs, mostly in states with right-to-work laws, which tend to be run by Republicans and voted for Mr. Trump. The BMW plant in South Carolina employs 8,800 people, and Mercedes has invested more than $4.5 billion in Tuscaloosa County, Ala. Of the top 10 states for employment by an international auto maker, Mr. Trump carried nine.

Yet Mr. Trump is fixated on a $15.4 billion automobile trade deficit with Germany. This is a meaningless statistic, not least because the inputs are produced along a global supply chain. Mr. Trump has some dim sense that no one drives Chevys in Hamburg, but one reason is that Europe distorts its market with emissions rules and high fuel taxes.

Mr. Trump is known to sound off and then ditch some of his worst ideas, and perhaps here he’ll do the same. But he could do much more for U.S. manufacturing by passing tax reform and dropping out of the Paris climate accord than with ill-informed tirades on trade.

https://www.wsj.com/articles/driving-under-the-influence-of-trump-1495838106

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