To South Carolina Sen. Lindsey Graham, there is no greater argument in favor of the Transatlantic Trade and Investment Partnership, or TTIP, than the hoops Mercedes-Benz Vans has had to jump through this past decade to sell its popular Sprinter vans in the United States.
A 25 percent tariff on light trucks imported to the U.S. from Germany has forced Dusseldorf-based Mercedes-Benz Vans to ship its Sprinters to the Port of Charleston in pieces, only to be reassembled after they reach the company’s North Charleston campus.
The convoluted maneuver lets Mercedes-Benz Vans avoid the 53-year-old tariff, but creates a “huge burden” and “a logistical nightmare” for the company, according to Volker Mornhinweg, who runs the van maker.
“Wouldn’t it be nice to have a world where you could trade with people in Germany and in South Carolina without having to go through all that mess?” Graham asked last week.
Soon, the tariff will no longer pose a problem for Mercedes-Benz Vans. The company last week broke ground on a full-fledged, $500 million manufacturing site that will make Sprinters from scratch at the company’s Palmetto Commerce Park site. The facility, which will employ up to 1,300 people, will start making Sprinters for sale in North America by the end of this decade.
Graham said the investment might have come a lot sooner, and South Carolina’s automotive industry grown a lot faster, if the excessive tariff didn’t exist.
“If we had a trade relationship with Europe, the biggest beneficiary would be the automobile sector of our economy,” said Graham, a Republican. “This is an example of why trade agreements between the United States and Europe will help.”
U.S. and European Union officials have been negotiating the terms of the TTIP for years in an effort to lower trade tariffs and remove costly regulations on business across the Atlantic Ocean. Graham said talks are in the final stages, although agricultural issues — such as concerns over food safety and EU subsidies — are holding up progress.
Graham said the benefits of the TTIP would be similar to those of the Trans-Pacific Partnership, another big trade deal that has been approved but not yet ratified. The TPP, which involves the U.S. and many Asian and other nations along the Pacific Rim, would create growth among those countries — which make up 40 percent of the world’s economy — by lowering or removing tariffs on 18,000 items. Graham also sees that agreement as a way to fight currency manipulation and trade violations committed by China.
“I just got back from Singapore and Taiwan and the TPP is important to them because they don’t want to be dominated by China,” he said. “They want alternatives to the Chinese economy. They want a relationship with the United States. And TPP is good for our national security because it creates a presence in Asia that gives us a pushback against China.”
Graham is critical of Republican presidential nominee Donald Trump’s anti-trade rhetoric, saying the billionaire’s plan to scuttle the partnerships and renegotiate deals with individual countries “doesn’t make sense.”
Graham also took a slight jab against Trump during last week’s groundbreaking ceremony. Speaking about how yet another trade pact, the North American Free Trade Agreement, will help Mercedes-Benz Vans sell its Sprinters across the southern U.S. border, Graham added: “If you can actually get it through the wall.”
“Just think about how many vans will be built here that will be sold throughout North America without any liability,” Graham said of NAFTA.
Graham, a former presidential candidate, also joked about his own campaign during a light-hearted speech as one of the groundbreaking event’s key attendees. Graham’s presidential hopes ended just before Christmas when he suspended his campaign due to poor polling results and failing to qualify for televised headliner debates amidst a crowded field of 16 other candidates.
“I finished in the top 17,” Graham quipped. “That’s pretty good.”
He also reiterated his determination to find federal dollars for a $509 million project that will dredge Charleston Harbor to 52 feet so the Port of Charleston can better accommodate large containerships moving through an expanded Panama Canal.
“We’re going to do everything we can to get it to 52 feet,” he said, “if I have to get a shovel myself.”
Reach David Wren at 843-937-5550 or on Twitter at @David_Wren_