The Trump presidency wants to shift the automotive industry to an” America First” plan, but it also wants to completely adhere to the trillion-dollar industry’s commitments to face enormous challenges.
Yet automotive manufacturers with robust national ties, such as South Carolina’s BMW plant, generally rely on a global supply chain for vital components, making President Donald Trump’s goal to produce cars entirely in the United States at best an objective that may take years to play out.
Trump’s mercantilist procedures, according to experts, undermine the aggressive interactions that have boosted the nation’s standard of living by enabling consumers to purchase premium products at affordable prices.
It’s a challenging condition that the Trump presidency has sought to condense into plain terms, arguing that designing tariffs on foreign-made car parts constitutes an important part of prioritizing U. S. workers and businesses.
White House Trade Adviser Peter Navarro stated in a CNBC interview in April that” this business model where BMW… comes into Spartanburg, South Carolina, and]has ] us assemble German engines and Austrian transmissions. ” That doesn’t work for America. It harms our economy in the process. It’s bad for our national security. They must arrive here, we want them to.
Foreign automakers in South Carolina “get away with murder”, Trump told a Chicago crowd in October, because they “build everything in Germany and then they assemble it here”.
Spartanburg, a small city in Upstate South Carolina, is the location of the BMW plant that the Trump administration has targeted. But even as a company with strong ties to local and state suppliers, the plant is facing uncertainty because it is part of an industry that relies on a global supply chain to produce quality vehicles at affordable prices for consumers.
When you ask people in abstract about tariffs, competition, and fairness, they generally say,” They’re for what you know is reciprocity, which would support some of these tariffs,” according to Advancing American Freedom policy director John Shelton. ” But they typically don’t realize or know how much of the even ‘ domestic manufacturing’ is deeply, deeply embedded in this international system”.
According to him,” In the case of BMW, the last time I checked, it was about more than half of all BMWs that were imported.” ” So these tariffs have a huge impact on American auto manufacturing, even though, you know, manufacturing, in many ways, especially auto manufacturing, is supposed to be the poster boy case for these tariffs”.
Consumers will likely pay the price, at least in the short term, for the Trump administration’s plan to impose tariffs on cars entirely in the United States, according to Joey Von Nessen, an economist at the University of South Carolina and expert on the state’s auto industry.
” From South Carolina’s perspective, the biggest cost, or the biggest downside, would be increased cost to businesses and to consumers”, he argued, noting that manufacturers would see costs increase for raw materials, and likely pass those costs on to customers in the form of higher prices.
” If you look at an automotive manufacturer… then how will that impact the demand for the vehicles that they are selling,” the statement reads. Nessen questioned. It depends on the individual business, but it might be that they need to alter their production schedules or consider changing their sales strategy if the costs rise.
Plant Spartanburg is now the largest single BMW production facility in the world. Since more than ten years ago, it has exported more than$ 10 billion worth of automobiles to the United States. In 2024, nearly 50 % of BMW vehicles sold in the U. S. came from Plant Spartanburg.
The South Carolina economy is being fueled by the plant, which has gained popularity nationwide. Since its inception, the German-based auto company has invested nearly$ 15 billion in the Upstate operation. The Spartanburg plant currently generates$ 27 billion annually, along with$ 3.1 billion in wages and salaries. The Upstate plant now supports nearly 43, 000 jobs across South Carolina, including more than 11, 000 associates at the Upstate location. Additionally, it contributes more than$ 43 billion to the U.S. economy each year and supports over 120, 000 jobs across the country.
The plant has relied on its supply chain web, much of which is based in-state, to propel its success. It frequently employs over 500 Palmetto State suppliers in order to create a flexible supply chain with unusually strong ties to local and domestic companies.
” Every 10 jobs that are created in South Carolina, in the automotive industry, we see an additional 25 jobs created elsewhere in the state, so for a total of 35, and the reason for that, for that multiplier effect, is because of the large supply chain”, Nessen said.
However, foreign countries account for 45 % of the total components for each car, even at BMW’s Spartanburg location, with about 20 % of those components coming from outside of North America. Common parts such as powertrains, drivetrains, engines, and transmissions are commonly produced in Europe.
Nessen said he doesn’t believe it’s “realistic” to expect BMW’s supply chain to be completely based in the United States, “because the global supply chain and the way that the manufacturing industry is interconnected globally are interconnected.”
” We don’t have the capabilities to produce, to produce everything, and so we do rely on other countries that produce certain materials and components more efficiently, and]in ] some cases, they produce them in a way that the U. S. can’t, at least not currently”, the USC professor said.
The Trump administration has continued to pursue its” America First” agenda by introducing a 25 % tariff on foreign-made car parts that went into effect last month. Although Trump softened aspects of the levy to allow manufacturers time to onshore critical components, the tariffs have a sweeping effect, taxing companies for importing pieces from powertrain components to car seats.
Trump stated in a press conference held in the Oval Office last month that he wanted automakers to manufacture complete vehicles in the United States using only domestic components, rather than importing any components from abroad.
” It used to bother me, they make a part in Canada, a part in Mexico, a part in Europe, and sent all over the place, and nobody knew what the hell was happening”, Trump said. However, they will need to have the entire thing built in America over the next year. That’s what we want”.
Shelton and other experts have argued that the president’s protectionist policies could undermine the” American dream.” Free trade allows for global sourcing, promotes a competitive marketplace where companies jostle to drive the cheapest possible production of quality goods, and expands access to a higher standard of living for the average consumer.
However, the Trump administration has suggested that it is worthwhile to risk risking lifestyle downgrades in order to compel automakers and other businesses to invest more heavily in domestic suppliers, especially in the near future. Last month, Trump implied that people affected by higher prices caused by protectionism could adapt their buying behavior and get by with fewer goods. He argued that the marketplace’s diversity of choices is essentially choice overload.
” All I’m saying is that a young lady, a 10-year-old girl, 9-year-old girl, 15-year-old girl, doesn’t need 37 dolls”, Trump recently told reporters aboard Air Force One. She might enjoy two, three, four, or five, but she might not.
” They don’t need to have 250 pencils … They can have five”, the president said during an NBC interview that aired the same day. In essence, he said,” I’m saying we’re not going to waste money on things we don’t need” with China.
But while the Trump administration appears to be operating on the premise that less is more if it’s made in the U. S., Shelton disagrees, based on patterns of purchase behaviors he’s observed in Anocastia, a poverty-stricken area in Washington, D. C., where he lived for years.
” The thing about Anacostia is that most people don’t have a lot of money, but they do have really nice cars. And so it’s not clear to me that if you make things more expensive, you make it so people can only afford, or should only be able to afford, two to three dolls, that that’s actually going to change their behavior, and then they’re gonna, like, balance their household budgets and like all because we put tariffs on these things”, he said.
Shelton argued that sweeping tariffs intended to force businesses to fully onshore operations frequently stifle the American dream rather than fundamentally altering consumer behavior or putting American workers first.
This thought is echoed by Dr. Wayne Winegarden, an economist at the Pacific Research Institute, who said that global supply chains have played a major role in helping companies such as BMW produce” a really good car at really good prices”.
” We’re living better than our parents, that’s why our standard of living has increased over time.” Our parents would have lived better than our grandparents”, he said. We’re in a bit of a doubt about that one, but you know our hope is that our children will live better than us. So, you know, the global supply chains really make things more efficient, and when they do that, they actually create more jobs here because our dollar goes farther”.
On a practical level, Winegarden said it’s unlikely to be possible for offshore businesses that rely on a global supply chain, like BMW.
” It takes years to build a plant, especially if you don’t even have it under construction. You must check it out. You gotta get all the permitting”, he said. Even if it’s just expanding our online presence,” Even if it’s not.”
” And so there’s just this idea that we can slap a tariff on, and next month, we’ll be producing all these things that were being bought overseas …]it’s ] just naive, and that’s not the way the world works”, Winegarden continued. It’s simply impossible to operate on a dime with a complex supply chain that is as complex as a global supply chain. … It takes time, you know, and that’s something that, again, Peter Navarro and President Trump really seem to kind of gloss over”.
He warned that history demonstrates that tariffs don’t always produce economic gains.
” If you go back to the 1950s, where actually Latin America was wealthier than East Asia, and Latin America used tariffs to protect their industries, and Asia engaged in the world. Fast forward to today. Latin America is poorer than they were then. According to Winegarden, East Asia has some of the highest per capita incomes in the world.
On seeking to increase the presence of supply chains in the U. S., Nessen says it is possible to “move in that direction”, and benefits could come as well. The USC auto expert claimed that the outcomes would take time and that could cost political money.
President Donald Trump speaks as he departs toward the Oval Office after signing an executive order at an event to announce new tariffs in the Rose Garden of the White House, Wednesday, April 2, 2025, in Washington. ( AP Photo/Mark Schiefelbein )
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” Potential benefits could be realized as soon as we see additional manufacturers looking to relocate to the United States or businesses that expand as a result of the tariffs ‘ potential to stifle foreign competition,” he said. ” That can take, in some cases, several years, because it takes a long time for a company that may be looking to invest in the U. S. to set up shop and to begin to begin operating”.
” One of the issues with tariffs is that the costs show up right away, but the benefits tend to lag,” Nessen said. ” The political question is, is it worth those additional costs, whatever those turn out to be, in order to get that supply chain more focused and get a greater presence of that supply chain in the United States”?
