Forgot protectionism — if President-elect Donald Trump wants U.S. car makers to outdo the likes of BMW and Mercedes-Benz, then the American auto industry needs to step it up a gear, a top German minister has said.

Sigmar Gabriel, Germany’s economy minister, was responding to Trump’s warning in an interview that the country’s auto makers will have to pay a 35% tax on every car imported into the U.S.

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“When you walk down Fifth Avenue, everybody has a Mercedes-Benz parked in front of his house,” Trump said in an interview with The Times of London and German tabloid Bild. “How many Chevrolets do you see in Germany? Not many, maybe none, you don’t see anything at all over there. It’s a one-way street.”

“ ‘The American car industry is getting worse, weaker and more expensive ... The U.S. needs to build better cars.’ ” — Sigmar Gabriel, Germany’s economy minister

Gabriel — who as vice-chancellor, is seen as deputy to German leader Angela Merkel — responded by saying the U.S. should focus on building more attractive auto models, rather than penalizing competition.

“The American car industry is getting worse, weaker and more expensive,” Gabriel told Bild on Monday. If U.S. buyers are choosing German models, as Trump suggests, then “that’s why the U.S. needs to build better cars,” he said.

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Trump has been on a campaign to get U.S. auto makers such as Ford Motor Co. F, +3.70% and General Motors Co. GM, +0.40% to shift manufacturing jobs from foreign plants back to the U.S. Several car makers have scrapped plans for new plants in locations such as Mexico, or said they would consider doing so in response to Trump’s threat of high border tariffs.

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Daimler AG DAI, +0.60% , the maker of Mercedes-Benz cars, and BMW AG BMW, -0.04% are among the German auto companies that have constructed plants in Mexico, with one eye on the U.S. market. Shares of Daimler fell 2% on Monday, while BMW’s stock 2.1% lower.

While GM’s Chevy brand doesn’t have a big presence in Germany, the car giant’s Opel unit last year said that its market share in Germany was roughly 8%. Mercedes-Benz and BMW each have achieved U.S. market shares of about 2%, according to Statista.