Tired of Winning: Why Peter Navarro Hates BMW
It takes a special kind of economic logic to look at a state-of-the-art automotive manufacturing facility and see a plot to harm America’s economic and security interests. But that’s exactly what Peter Navarro, President Trump’s top trade advisor, wants you to believe about BMW’s Plant Spartanburg factory in South Carolina.
Towards the end of a feisty CNBC interview last week, Navarro launched into an attack on the German automaker that really piqued my interest:
“This business model, where BMW … come[s] into Spartansburg [sic], South Carolina, and have us assemble German engines and Austrian transmissions, that doesn't work for America. It's bad for our economics. It's bad for our national security.”
Navarro doubled down in a subsequent interview, telling Fox News that BMW’s U.S. footprint was a “scam.”
“And the thing like, you take automobiles, what we’re doing now is a scam, like BMW comes to Spartanburg, South Carolina, and all we do is assemble German transmissions and autos. It’s like they get all the good jobs. They get all the good profits, and we get stuck with a hindsight.”
Mind you, nobody had even asked Navarro about BMW.
It turns out that his fixation on BMW’s operations in South Carolina is longstanding — and also quite puzzling given that Plant Spartanburg represents everything the Trump Administration says it wants to achieve: reindustrialization, manufacturing jobs, and exports.
Consider:
Over the past three decades, the company has invested nearly $15 billion to build and expand its eight million square foot campus, which is now one of its largest production facilities in the world.
11,000 workers are employed on-site, directly accounting for nearly five percent of the state’s manufacturing jobs.
BMW exported more than $10 billion in automobiles in 2024 alone, making it the top U.S. auto exporter. That’s right — not Ford or GM in Michigan. Not even Toyota in Kentucky and Texas. BMW in South Carolina. (The state is also the top U.S. exporter of tires.)
In fact, the majority of the company’s U.S. production gets exported around the world to markets like South Korea, China, Canada, Great Britain, and even Germany.
One study estimated that Plant Spartanburg generates $27 billion in annual economic impact, equivalent to more than a tenth of the state’s GDP. The total number of direct and indirect jobs supported by the plant adds up to nearly 43,000 throughout the state.
These are big numbers, but they hardly do justice to the impact BMW has had in the region.
I know this because I grew up in South Carolina. I keenly remember the excitement when BMW announced it would build its first full manufacturing facility outside of Germany in the “Upstate” region along Interstate 85, just a few miles from my house. In the years since, I have watched this single investment fuel a remarkable local transformation that continues to this day.
Indeed, Plant Spartanburg is perhaps the most important investment in South Carolina’s history. It came at a time when the Palmetto State’s economic future was deeply uncertain, enabling the state to transition from a dying textile industry to a thriving advanced manufacturing sector. BMW also sparked a wave of follow-on investment from companies around the world, helping South Carolina become a hub for foreign direct investment. Governor Henry McMaster recently alluded to this inflection point: “BMW's arrival in South Carolina over 30 years ago transformed our economy and global reputation.” He’s right, and the benefits to local workers have been enormous.
Here is how two local business groups jointly responded to Navarro’s comments: “BMW is responsible for Upstate South Carolina’s density of engineering, supply chain, and logistics jobs, and has contributed to drastic quality of life and infrastructure improvements across our region.”
Never go Full Navarro
So why would one of the president’s top advisors — arguably the person who best reflects Trump’s thinking on trade — describe such a textbook success story as a scam and a threat to national security? Absurd as it may sound, Navarro believes that the profound benefits BMW has delivered to the U.S. economy are somehow outweighed by its reliance on a global supply chain.
That’s literally it. We’re supposed to ignore everything else because — hey, wait, is that a German engine?
And this, in a nutshell, is the logic behind a sweeping new tariff agenda designed to make every foreign input in the American manufacturing process more expensive and harder to obtain.
Contrast that with Vice President Vance’s distillation of the administration’s economic philosophy: “if you invest in and create jobs in America, you'll be rewarded. We'll lower regulations and reduce taxes.”
So which one actually reflects administration policy? It’s genuinely hard to tell.
It would be convenient to simply dismiss Navarro as a crank, but it is clear that President Trump listens to him. These were the president’s comments last year at the Economic Club of Chicago:
“But you know what they really are? Assembly, like in South Carolina. But they build everything in Germany and then they assemble it here. They get away with murder because they say, “Oh yes, we’re building cars.” They don’t build cars. They take them out of a box and they assemble them. We could have a child do it.”
It’s not hard to guess who gave the president this idea.
Knowing what success looks like
For the sake of argument, let’s take the Navarro critique at face value: a venerable German company poured billions of dollars into a small state with an anemic manufacturing base, created thousands of jobs, became the biggest U.S. automotive exporter, and sparked a regional renaissance by doing Lego-kit type of assembly so basic that, but for child labor laws, the youth of the Palmetto State would be at full employment. What a great deal for America! If true, this would demonstrate how the U.S. and its workforce can reap enormous benefits from being deeply involved in just one part of the advanced manufacturing process in a globally-connected industry.
But it turns out that Navarro’s description isn’t just insulting to local workers — it also wildly undersells the scope of Plant Spartanburg’s operations.
First, here’s how the company describes its South Carolina footprint, where it builds more than 1,500 vehicles every day:
“The 1,150-acre, 8-million-square-foot campus includes three body shops with more than 2,600 robots, two paint shops, and two assembly halls. The plant generates about 20 percent of its own power from methane gas and uses hydrogen fuel cell technology to power about 800 pieces of material handling equipment. The BMW Group announced in 2022 that it would invest $1.7 billion in its U.S. operations, including $1 billion to prepare the Spartanburg plant to assemble fully electric vehicles and $700 million to build a new high-voltage battery assembly plant in Woodruff. When completed in 2026, Plant Woodruff will assemble the sixth-generation batteries to supply fully electric vehicles at BMW Manufacturing. By 2030, the BMW Group will assemble at least six fully electric models in the U.S.”
What about the company’s supply chain? Like every automaker, BMW does indeed source parts from abroad. But it also relies on a massive U.S. supplier network that it helped to establish, including over 500 suppliers in South Carolina alone. Roughly 70 percent of the steel and aluminum used in BMW’s U.S. production is domestically sourced. (Last year, the company opened a new press shop where it takes raw steel coils and stamps them into sheet metal for its vehicles.)
And the company’s U.S. presence has been a magnet for other companies in the supply chain. Just last year, ZF, another German manufacturer, announced a $500 million investment in the state to build transmissions for BMW and other customers.
If all of this doesn’t qualify as good for the U.S. economy, it’s hard to imagine many investments that would.
I’m belaboring the details here for a reason: assessing whether BMW’s investment has been good or bad for the U.S. should be the easiest imaginable judgment test for a senior economic official. Navarro fails that test spectacularly. Instead, his comments reveal an all-or-nothing, zero-sum understanding of global trade and investment that is profoundly at odds with reality.
The specific point that escapes Navarro is that a globally integrated supply chain, a strong domestic supplier network, and a competitive global export footprint are all complementary. Sourcing 100 percent of parts domestically is a worse than useless target — it actively contradicts the goal of a strong domestic economy.
A country can attempt to go full autarky, or it can create competitive export firms that are high up the value chain and deeply integrated into global supply networks wherever necessary or advantageous. A country cannot do both.
According to Navarro’s upside-down logic, America has somehow been victimized by BMW’s three-decade, multibillion-dollar bet on the U.S. economy. Rather than celebrating how such investment makes us richer, Navarro sees it as proof that America is getting its pockets picked.
The consequences of getting it wrong
Navarro’s comments send a clear message to potential investors around the world: build a manufacturing facility in the U.S., spend billions of dollars, create thousands of jobs, boost American exports, partner with local universities and technical schools, support a vibrant supplier network, and you, too, may be rewarded by hearing a top White House official call your business a scam on national television.
This is an outrageous disservice to the very goals the Trump administration is seeking to advance.
Already, manufacturing sentiment has plummeted. According to the New York Fed’s April manufacturing survey: “Firms expect conditions to worsen in the months ahead, a level of pessimism that has only occurred a handful of times in the history of the survey.”
The key to understanding Navarro’s hostility toward BMW can be found in this quote about Plant Spartanburg by the company’s former CEO, Harald Krüger: “Free trade has made this success story in the U.S. possible.” NAFTA, not tariffs, made it easier to build the integrated North American supply chain so crucial to the company’s operations. And U.S. trade agreements with partners around the world made South Carolina a launchpad for reaching both American consumers and global export markets.
Recognizing this success story for what it is would shatter Navarro’s entire theory of the world.
As Upton Sinclair famously wrote, “It is difficult to get a man to understand something, when his salary depends on his not understanding it.” Peter Navarro’s salary depends on not understanding when America is winning from globalization — something so easy to grasp that, unlike building a BMW, even a child could do it.
All of the statistics used in this piece are publicly available. Two particularly useful resources can be found here and here.