U.S. to Hit Chinese-built Vehicles With 25 Percent Tariff; China Fires Back

Steph Willems
by Steph Willems
u s to hit chinese built vehicles with 25 percent tariff china fires back

Just in time for the weekend, an escalation in the ongoing trade wars has seen the Trump administration announce a 25 percent tariff on $50 billion worth of goods imported from China. These tariffs include automobiles. For its part, China retaliated by applying a further 25 percent tariff on a similar amount of American goods, including automobiles.

The move comes less than a month after China announced a plan that would lower import duties and eventually allow foreign automakers to set up shop without a joint Chinese partner. Of course, that was then, and this is now.

Both sets of duties will come into effect on July 6th, with the Office of the United States’ Trade Representative publishing a long list of products impacted by the new tariffs. Initially, the 25 percent tariff will only apply to $34 billion worth of goods, most of them industrial in nature. The remaining $16 billion, which appeared on a list released in April (later revised), will become the subject of consultations, including public hearings.

Bloomberg reports that the price of a Buick Envision, a model solely sourced from China, would rise $8,000 after July 6th. Last year, just over 58,000 vehicles entered the U.S. from that country.

China’s sticking to the same schedule as Trump on this, as well as to the dollar amounts. After jacking levies on $34 billion in U.S. goods (the list includes agricultural products and seafood, in addition to automobiles), the country will hold off on the remaining $16 billion until a later date. No doubt, it’s waiting to see what the White House decides.

Under China’s previous plan, issued in response to Trump’s threat to do exactly this, China would have lowered the import duty on U.S. automobiles from 25 to 15 percent on July 1st while cutting its tariff on imported auto parts to a flat 6 percent. The U.S. already levies an import fee of 2.5 percent on all overseas automobiles, with the exception of light trucks. Since the Johnson administration, the “chicken tax” (a 25 percent tariff) has kept cool compact trucks away from our shores.

According to the New York Times, a senior administration official said companies would be able to apply for exemptions from the tariffs, assuming they cannot source products or materials from anywhere else.

Critics of Trump’s plan include the U.S. Chamber of Commerce and the National Retail Association, though certain lawmakers, including Senate Minority Leader Chuck Schumer and Senator Marco Rubio, said the action against China was A-OK. What worries many observers, especially those in the auto industry, is that the Chinese tariffs are a prelude to a 25 percent import fee on all inbound vehicles — including those from Japan, Europe, and Canada.

[Image: GM China]

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  • 28-Cars-Later 28-Cars-Later on Jun 17, 2018

    This is going to put a kink in Ford's no cars for old men plan (I argue Ford as a backup plan would import small cars from China and Europe if need be. Now it looks like they won't be able too).

  • PandaBear PandaBear on Jun 18, 2018

    Be careful what you wish for. You think you will get more jobs in the US with trade war, but you may end up with fewer. Full blown trade war may accelerate automation, and all of the jobs will be gone from both sides.

  • Tassos https://carsandbids.com/auctions/rj5Blq50/2001-volkswagen-eurovan-mv-weekenderNote the seller's name: "My VW Sucks" (!!!)WHy am I not in the very least surprised.
  • George Who’s winning the UAW strike? Nobody.Who’s losing the UAW strike? Everybody.
  • Zznalg Now, a slam of Subaru. I own an Outback Wilderness. Subaru has capitulated to lawyers and the regulatory environment to render life with their vehicles quite unpleasant. A few cases in point: The vehicles won't allow you to drive one MPH without ALL the seatbelts fastened. You cannot pull a Subaru out of a garage or parking space with no seatbelt without the car screaming at you. First there is the annoying beeping. After a few seconds Subaru ups its game and raised the volume ridiculously. To get it to shut up, I've even had to turn off the car and open a door. It is not enough to put it into park. The beeping continues. I am Not talking about driving without a seatbelt. I'm talking about 1 MPH maneuvers in one's own driveway. Next, the car's auto-breaking is tuned to slow you down or even slam on your brakes at every possible opportunity. The other day, my Wilderness decided to do just that almost resulting in my being rear ended. For NO reason. Next, the Outback Wilderness' transmission is tuned to prevent forward motion. It does its best to NOT GIVE POWER in nearly every situation unless you keep the accelerator depressed for more than 1-3 seconds. This is actually unsafe. In fact at highway speeds, when one presses the gas, the car momentarily reduces power and slows down. The paddle shifters help. But overall, Subaru has so neutered the Outback Wilderness to make a potentially great vehicle quite a drag to own and actually unsafe, in the service seemingly of preventing lawsuits and satisfying the EPA. I know not all of this may apply to the Crosstrek Wilderness but if you test drive one, you would be advised to look for these flaws.
  • Art_Vandelay UAW leadership always brings up CEO pay. Yet they never bring up that their last deal would likely have been better for membership had they not been on the take from those same CEO's. UAW members have far more beef with their own leadership than senior management of their companies.
  • IH_Fever Another day, more bloviating between the poor downtrodden union leeches and the corporate thieves. But at least pantsuit guy got a nice new shirt.