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White House presses German automakers to expand U.S. investments

Reuters  |  WASHINGTON 

By David Shepardson

WASHINGTON (Reuters) - pressed senior executives of leading German automakers to expand their investments in the as the 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.

and executives both said they thought the chances that new tariffs will be imposed had been lessened following the meeting.

Volkswagen said the company was "considering building a second car plant" and was in talks with about a broader alliance. He said it could include VW using unused Ford capacity to build cars.

"The has a point," Diess said, saying officials "tried to convince us to invest more into and we are prepared to do this."

Daimler 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.

said in a statement that it plans to invest $600 million more at its in through 2021 for future generations of the BMW X models and will create 1,000 more jobs by 2021.

Diess said he thought the companies had "made a big step forward to avoid the tariffs."

Wilbur Ross, U.S. Trade and were among those who met with the executives.

Trump has threatened to impose stiff tariffs on cars assembled in the as part of his "First" trade policy.

told Fox Business Tuesday that he thinks "we have a really good path to coming up with having these companies invest more in " He added that the German automakers "wouldn't be coming to the table here to talk to us unless the had auto tariffs on the table."

Although the handles trade negotiations on behalf of the common trading bloc, the 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 in the 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 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, reported in November.

Kudlow said he did not think that were imminent, though he added that they were in Trump's "quiver of arrows."

A official briefed on the matter told on Monday that no final report on the investigation is expected for at least a couple of weeks.

(Reporting by David Shepardson; Editing by and Grant McCool)

(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)

First Published: Wed, December 05 2018. 04:19 IST