U.S. Commerce Secretary wants to "poach" Europe's most core enterprises! Mercedes-Benz chief: Europe needs to compete
The Trump administration is actively lobbying top European manufacturers to move their headquarters to the United States, highlighting the intense competition for investment across the Atlantic.
According to the Financial Times on Friday, Mercedes-Benz CEO Ola Källenius revealed that U.S. Commerce Secretary Lutnick suggested about a year ago that the German automaker relocate its headquarters to the United States.
Källenius said he declined the proposal but warned that this aggressive investment promotion from the U.S. sends a clear signal to Europe and Germany: the competition from America must be taken seriously. At the time, Lutnick presented him with many advantages of investing in the U.S., including lower energy costs, streamlined regulations, and low tax rates.
This incident comes as German car manufacturers face the dual pressure of American tariffs and high domestic production costs, which continue to shrink profit margins. Meanwhile, many European companies are frustrated by increasingly burdensome regulations from Brussels, further weakening Europe’s investment appeal.
The U.S. Commerce Secretary's Investment Drive
Källenius confirmed on Thursday that about a year before Lutnick was appointed Commerce Secretary by the Trump administration, he met with him in New York. “Lutnick excellently showcased the reasons for investing in the U.S.: lower energy costs, streamlined regulations, and low tax rates,” said Källenius.
Although he rejected the suggestion to move headquarters, Källenius emphasized the significance of the signal this event sends. “If you want capital to flow to Europe, you’re also in competition. We are in competition,” he said.
Double Pressures on German Car Makers
German car manufacturers are currently facing multiple challenges. On one hand, American tariffs on imported vehicles squeeze export profits; on the other hand, high production costs in the German domestic market further weaken competitiveness.
Källenius stated that Mercedes-Benz expects “no tariff relief for the foreseeable future,” but the company will continue to invest in the U.S. The firm, which is celebrating the 140th anniversary of Carl Benz’s patent application for the first internal combustion engine automobile, currently operates factories in Alabama and South Carolina.
Volkswagen CEO Oliver Blume told Germany’s Handelsblatt last weekend that without lower tariffs, “large-scale additional investments are not financially feasible.”
EU Regulations Trigger Corporate Dissent
Many European companies are disappointed by Brussels’ increasing regulatory measures. Some German automakers are skeptical about the EU’s proposed local content rules, believing they may drive up costs.
Källenius warned that such rules should not be “implemented in a rough manner, or they might stifle growth, fuel inflation, and cut off trade.” He emphasized that Europe needs to recognize it faces competition for investment, must understand investors’ mindsets, and realize America’s advantages in the business environment.
This statement reflects the deep concerns within European business circles about the regulatory environment and investment attractiveness, highlighting the tough challenges Europe faces from the U.S. in global capital flows.
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