Following former President Donald Trump’s electoral victory over Vice President Kamala Harris in the 2024 presidential election, BMW’s chief executive has expressed optimism about potential trade policies that could affect the automotive industry.
In the early hours of November 6, Trump declared victory alongside his running mate J.D. Vance, surrounded by supporters including UFC president Dana White and Tesla CEO Elon Musk. As the automotive industry contemplates the implications of Trump’s return to office, BMW CEO Oliver Zipse has taken a notably confident stance regarding potential trade policies.
During a Q3 2024 earnings call, Zipse indicated that proposed import tariffs under Trump’s administration might actually advantage the German luxury automaker. His optimism stems from BMW’s substantial manufacturing presence in Spartanburg, South Carolina, where approximately 11,000 workers produce 1,500 vehicles daily. The facility manufactures several popular SUV models, including the X3, X4, X5, X6, X7, and XM, with 60% of production exported to 120 countries worldwide.
Zipse emphasized that BMW’s strong U.S. manufacturing footprint, with two-thirds of its American sales coming from Spartanburg-produced vehicles, positions the company favorably against potential trade restrictions. The company has also demonstrated commitment to technological advancement at the facility, recently testing the Figure 02 humanoid robot for chassis assembly operations.
Trump’s campaign rhetoric has targeted automakers operating outside U.S. borders, particularly in Mexico. During a September rally in Savannah, Georgia, he proposed implementing a 100% tariff on vehicles crossing the Mexican border, aiming to encourage domestic
manufacturing and employment.
This potential policy has raised concerns among other manufacturers, notably Honda. The Japanese automaker’s Executive VP Shinki Aoyama expressed worry about the company’s Mexican operations, which produce approximately 200,000 vehicles annually, with 160,000 units exported to the U.S. market. Honda’s Mexican-made vehicles include the Prologue EV and HR-V crossover SUV.
However, Trump’s proposed tariff strategy faces a significant obstacle in the form of his own previous policy achievement: the United States-Mexico-Canada Agreement (USMCA). Signed into law during his first term, the USMCA replaced NAFTA and currently prohibits tariffs on numerous goods while allowing free trade among member nations. The agreement requires vehicles to contain 75% North American-made parts to qualify for tariff-free status, an increase from NAFTA’s 62.5% requirement.
Any modification to the USMCA would require congressional approval, potentially complicating the implementation of Trump’s proposed tariff policies. This creates an interesting dynamic where one of Trump’s signature achievements could potentially impede his new automotive industry objectives.
BMW’s continued investment in its Spartanburg facility, coupled with its strategic positioning in the U.S. market, appears to have insulated the company from potential negative impacts of Trump’s proposed policies. While other manufacturers express concern about possible trade restrictions, BMW’s substantial American manufacturing presence may provide it with a competitive advantage in the evolving automotive landscape under the upcoming Trump administration.