Trump comments cause German manufacturer share price drop

Shares in German carmakers BMW, Volkswagen and Daimler have fallen after Donald Trump warned that cars built in Mexico would be taxed at 35 per cent if they were exported to the US.

The President-elect, who will be inaugurated on Jan 20, said he would advise car firms "not to waste their time and money" by building factories in Mexico.

Trump's comments were seen in Germany as a threat to all car firms. BMW shares fell by 1.5% with Volkwagen was down 1.8% and Daimler, owned by Mercedes Benz, dropping 1.6%.

Trump told German newspaper Bild: "If you want to build cars in the world, then I wish you all the best. You can build cars for the United States, but for every car that comes to the USA you will pay 35% tax.

"I would tell BMW that if you are building a factory in Mexico and plan to sell cars to the US without a 35% tax then you can forget that."

In response, Germany’s deputy chancellor and minister for the economy, Sigmar Gabriel, said on Monday morning that a tax on German imports would lead to a “bad awakening” among US carmakers since they were reliant on transatlantic supply chains.

“I believe BMW’s biggest factory is already in the US” Gabriel told the Bild newspaper in a video interview.