Part of problem for BMW is that it stands to be hit with import tariffs on sedans imported into the United States, and potentially hit with retaliatory tariffs in other countries on U.S.-made vehicles. China, for instance, briefly raised tariffs on any U.S.-made vehicles to 40 percent in 2018 in response to U.S. duties on Chinese products.
U.S. premium SUV sales climbed from roughly 1 million in 2015 to 1.3 million in 2018 and are expected to hit 1.5 million by 2020.
President Donald Trump has repeatedly railed against what he says is a fundamental trade imbalance between the United States and its trading partners, including China and European countries. Tariffs, such as the 25 percent tax on imported pickups, have been successful in keeping American-made trucks popular and U.S. workers employed, he said on Twitter in late November.
“The reason that the small truck business in the U.S. is such a go to favorite is that, for many years, Tariffs of 25% have been put on small trucks coming into our country. It is called the “chicken tax,'” he said. “If we did that with cars coming in, many more cars would be built here…..”
Correction: BMW expects to hit a near-record level of production at the Spartanburg, South Carolina, plant this year of more than 400,000 vehicles. An earlier version misstated the number of vehicles.