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BMW considering second U.S. plant as Trump weighs car tariffs

One report says Trump could impose 25 percent duty on imports next week

LOS ANGELES — BMW is considering a second U.S. manufacturing plant that could produce engines and transmissions, Chief Executive Harald Krueger said on Tuesday, shortly after a report that U.S. President Donald Trump would impose tariffs on imported cars from next week.

European auto stocks extended losses on Tuesday after a German magazine reported that U.S. President Donald Trump could impose tariffs on imported cars from next week.

Wirtschaftswoche cited "EU sources" as saying a U.S. Department of Commerce investigation report was on Trump's desk, adding: "Trump will possibly decide on tariffs as early as next week after the G20 meeting in Buenos Aires."

It cited the sources as saying the report recommended a 25 percent customs duty on car imports from all countries except Canada and Mexico.

However, the White House has repeatedly pledged not to move forward with imposing tariffs on the European Union or Japan as long as it is making constructive progress in trade talks.

The European Commission, which oversees trade policy for the 28-member European Union, declined to comment on the report in general, but did say that Wirtschaftwoche's reference to EU Trade Commissioner Cecilia Malmstrom heading to Washington on Wednesday was not correct.

Neither White House nor the U.S. Commerce Department immediately responded to a request for comment.

The Commerce Department has not publicly released any findings from its investigation into whether imported autos and parts pose a national security risk. Reuters reported that the department submitted its recommendations earlier this month to the White House, which did not immediately act.

Trump could take weeks or month to decide. Once he makes a decision, the White House has 15 days to impose the new tariffs.

BMW's Krueger, meanwhile, in an interview at the Los Angeles Auto Show, said BMW is considering changes to U.S. operations as sales in the region grow, Krueger said. BMW has a U.S. vehicle assembly plant, in South Carolina, is planning to open a Mexico factory next year, and is considering changes to its current scheme of importing engines and transmissions.

"We're at the range where you could think about a second location" in the United States, he said, adding that such a factory would provide a natural currency hedge.

Reporting by Alexandria Sage

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