US Slaps Chinese-Imported Cars With 25-Percent Tariff, GM Responds
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General Motors will have to contend with additional tariffs that will affect the cars it exports from China to the United States. On Wednesday, Robert Lighthizer, the U.S. trade representative, announced a new round of trade measures that includes a 25-percent tariff on Chinese cars exported to the U.S, according to a Financial Times report.
At present, the move doesn’t affect domestic Chinese automakers since they do not presently sell cars in the U.S. However, General Motors, notably, builds the 2019 Cadillac CT6 Plug-In and 2019 Buick Envision crossover in China for export to the U.S. Now, said cars will face a 25-percent tax coming into the country. The old tariff was 2.5 percent, and the new figure matches China’s 25-percent tariff on imported U.S. cars.
GM released a statement following the latest tariff announcement and it reads:
We continue to believe both countries value a vibrant auto industry and understand the interdependence between the world’s two largest automotive markets. We support a positive trade relationship between the U.S. and China, and urge both countries to continue to engage in constructive dialogue and pursue sustainable trade policies.
According to the report, GM imported 29,878 Envisions to the U.S. from China last year, which made up 17 percent of Buick’s total sales last year.
Ford also released a statement encouraging the U.S. and China to hold more constructive discussions. The Dearborn, Michigan, based automaker plans to import the 2019 Focus from China as well.
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1.7 vs 17?
No tariffs in place thus far, by either side. This is the starting point for some levels of meaningful negotiations.
Both Countries can balance trade without tariffs, by implementing new trade policies.
If the Trump administration applied tariffs on every item made in China, the Apple iPhones will cost almost double.
Great! Maybe then we can move away from Communist-provided slave labor and build those critical digital components that so much of “modern” life depends on here in North America. Are you going to tell me that an illiterate teenager in China is more qualified for the job than a U.S. or Mexican citizen?
I want to see China bleed, as it rightfully deserves! I won’t even look at a Volvo because I know where my money would go: into the pockets of Communist stooges and slave barons!
So does the cost of the tariff get added to the price of the vehicle. If so that adds an additional $7,650 to a base Envision of $34,000. Eeeesssccchhh.
Sounds good to me! They need to start making those Envisions in N. A. so I can buy one!
What difference does it make if an American automaker produces it in China? Part of that money goes to GM anyhow.
More than likely, if the tariff is implement by China, GM will waive (take care of the tariff itself) it for the customers like they did with the luxury tax during Clinton administration.
In response to my comment, GM would have to spend 9 figures to waive the tariff if they import 30K Envisions a year. IMO, this won’t happen if China is planning on selling their makes here in the future, or else it would be a financial disaster and hardship on any Company like GM and Ford.
The best option at this moment is to have positive negotiating. Second option is to make those vehicles here if the former does not go very well which would not be as expensive for as waiving the tariffs for consumers is concerned in the longer term.
i got an idea for GM build the damn models in the USA to avoid the tariffs and give the jobs to American workers , and the hell with globe industry . more Americans will be employed to purchase American autos . what a ingenuous concept
Kick the foreign car companies out of the US! Don’t let them build them here, don’t let them sale cars here. Problem solved!
Brian. not letting other countries build cars here eliminates jobs for US workers. GM will have to work on quality to compete, especially Cadillac.
I agree, Susan. However, I would insist on rules that require that whatever profits foreign companies make building and selling cars in the U.S. must remain in the U.S. economy, deposited in U.S.-based banks subject to U.S. financing laws … which are the same terms that China imposes in turn!
I would agree with this!
with a history/experience of negotiating 6 bankruptcies, this should be a piece of cake for the master of the deal.
Yep, the Stable Genius has it all covered. 😉
Most of the Envision’s that are built there are sold there. It makes sense to build them all there rather than a few here. However, if this tariff goes into effect then build the ones for sale in NA in the US! More jobs, better build quality.
Just go back to the old auto pact way of doing things. If you sell X amount of vehicles in a country, then build the same amount of vehicles in that country, doesn’t have to be the same vehicles. If North America wants to sell 20,000 vehicles in China, then build 20,000 vehicles in China. If China wants to sell 20,000 vehicles in North america, they should build 20,000 vehicles in North America. No tariffs required. No, this won’t work for all markets, especially small markets.
I find it ridiculous that GM imports the Envision from China. It is very similar to the Equinox, Terrain, and XT5. And if they are not flexible enough to build it here, they should be tariffed.
They should just cancel the CT6 PEV for the U.S. They might be able to sell 500 per year, if they’re lucky.
Hey, not so fast! They sold 17 just last month! Who wouldn’t want a $100,000 Chinese Cadillac?
Sounds like a fairs/fair deal to me – if they charge a 25% tax on our vehicles, it’s only fair that we charge the same on cars from there. I don’t get why the media calls this unfair, we’ve been on the downside of an unfair agreement for a long time! If they want to open up to accept our cars w/o a tarriff, then we could do the same.
Ultimately I think this will be better for GM. What China has done to US automakers is obscene. American cars imported into China face 25 percent tariffs. If GM, for instance, wants to build a factory in China and build locally to avoid the tariff, they can only do so if they enter into a joint venture with a Chinese automaker. Then that Chinese company keeps half the profits but contributes nothing in terms of technology and know-how. The American carmaker essentially has to go over and train the Chinese to build cars and give them half of the proceeds whilst doing so. Meanwhile Chinese goods flow freely into the US. It’s outrageous and should’ve been stopped a long time ago. If it takes a “trade war” to correct this, so be it. We are the ones that, to put it politely, are being taken advantage of.
Yeah that’s right. Its not like the Chinese would like, nationalise GM factories in China or anything….(nice one Mary !)
Here’s an idea. With the impending demise of the Sonic, the Orion plant needs product. Build the Envision there!
Everyone with at least one eye open saw the political winds changing. GM was and is foolish for building a critical vehicle for Buick in China when no less than two plants in North America already build vehicles on that chassis.
I want fair trade.
Until then I would never even consider the Envision or any other vehicle made in China.
Agreed. As I’ve mentioned elsewhere, I really admire Volvo design — inside and out — but I can’t shake off the thought that my purchase would only be making a bad situation worse by supporting an unconscionable, unscrupulous and unpatriotic cabal that make trillions from slave labor!
They did that to avoid China’s 25% tariff on imported cars. GM builds other vehicles in China to avoid it also.
How about matching their Value Added Tax 17, going to 16%, and the EU’s 20% VAT? Then it doesn’t look punitive just matching what they do to out exports.
Does anyone consider that China buys about 250K of the Envision for the home market? The rather puny number sold here do not justify setting up all the tooling etc. even if they double their NA sales. It is a simple business decision and by the way the Premium we have had for the last two years is built to the same quality level of any German vehicle.
Importing new models from China to test makes a lot of sense; but once vehicles like the Envision CUV demonstrates there is a market for such a vehicle in the US then it’s up to General Motors to transition production to the United States and this is true for the Buick Encore also.
Correction Ford is based in Dearborn, GM is based in Detroit.