By David Shepardson
WASHINGTON (Reuters) - President Donald Trump pressed senior executives of leading German automakers to expand their investments in the United States as the White House considers imposing new tariffs on European-made vehicles.
German automakers said after the meeting they told Trump they planned to boost U.S. investments, but warned they would be unable to do so if the administration imposed new tariffs.
Volkswagen CEO Herbert Diess said the company was "considering building a second car plant" and was in talks with Ford Motor Co
Daimler chairman Dieter Zetsche told reporters that additional U.S. investments are contingent on conditions remaining the same. Zetsche said the "implicit potential threat" of new tariffs had been reduced after the meeting.
Diess said he thought the companies had "made a big step forward to avoid the tariffs."
White House trade adviser Peter Navarro told Fox Business News Tuesday that he thinks "we have a really good path to coming up with having these companies invest more in America." He added that the German automakers "wouldn't be coming to the table here to talk to us unless the president had auto tariffs on the table."
Although the European Commission handles trade negotiations on behalf of the common trading bloc, the Trump administration has summoned the auto bosses as part of a campaign to "rebalance" global trade flows.
Last week, BMW said it was considering building a second manufacturing plant in the United States that could produce engines and transmissions, drawing praise from Trump, who has made the revitalization of U.S. manufacturing a key pillar of his economic program. On Tuesday, BMW emphasized that it had not yet made a final decision.
Zetsche said it is "impossible" to build all vehicles sold in the United States because of small volumes of small luxury cars.
The Commerce Department has circulated draft recommendations to the White House on its investigation into whether to impose tariffs of up to 25 percent on imported cars and parts on national security grounds, Reuters reported in November.
Kudlow said he did not think that car tariffs were imminent, though he added that they were in Trump's "quiver of arrows."
(Reporting by David Shepardson; Editing by Paul Simao and Grant McCool)
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