According to recent reports, the US President-elect Donald Trump has recently claimed in an interview with German-based newspaper Bild to levy 35% border cess on the German Car Companies who choose to import cars from their respective lands to the USA. Companies like BMW, Mercedez-Benz, and Volkswagon, he says, would have to pay 35% tariff on all the imports regardless of setting up plants in Mexico or elsewhere. With the promise to revive U.S. industrial employment, Trump has rebuked carmakers that use low-cost Mexican plants to serve the U.S. market. He has also warned Japanese Toyota Carmakers that they could be subjected to a "big border tax" if it builds its Corolla cars for the U.S. market.
Considering the fact that all the targetted manufacturers have almost $1 billion each to be invested in the country's automobile buildup and has also contributed heavily to increasing the economy by four folds in the last half decade, it might hit the country's pace of progress in the automobile industry. But at the same time, it would boost the home-based manufacturers like Tesla, Ford, General Motors, Chrysler, and Cadillac, generating more employment for its own workers.
As we all are well aware that our country aims to move up the ladder of being the largest automobile industry in the world, even our Prime Minister Narendra Modi can think to ply a similar plan of action so as to support Tata, Mahindra & Mahindra and Maruti Suzuki in our own markets. The competition with foreign brands is healthy but somehow reduces the market for our own companies. If we also impose some trade barrier via appropriate taxation, this might boost up our economy and generate self-sustenance in the industry in a long run.
