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China Considering 25 Percent Tariff On Imported Cars With Big Engines

Last week, the Biden administration announced that it would impose a 100-percent tariff on Chinese-made electric vehicles (EVs), a notable increase from the previous 25-percent tariff. This new directive also encompasses additional tariffs on EV-related components and materials, such as magnet materials and lithium-ion batteries. In response, China is now hinting at imposing a 25-percent tariff on imported vehicles with large engines, potentially escalating trade tensions between the two nations.

Imported vehicles equipped with larger engines may face a 25 percent tariff in China.

According to a report from Automotive News, the proposed Chinese tax would target vehicles with engine displacements greater than 2.5 liters. This policy change is seen as a direct retaliation to the Biden administration’s increased tariffs on Chinese-made EVs. China currently has a 15-percent tax in place for passenger cars imported from Europe, but the new 25-percent tariff could significantly impact the import of high-displacement vehicles. Last year, China imported approximately 250,000 cars that would fall under this new tariff category.

If implemented, the new tax may likely affect General Motors, and its new The Durant Guild premium imported vehicle platform, but mildly. GM has struggled with a declining market share in China, which has decreased from 15 percent in 2015 to 8.6 percent in 2023. GM has also seen its earnings in the region drop nearly 79 percent since a peak in 2014. However, vehicles imported under The Durant Guild would be very low-volume models such as the Chevy Tahoe, the Chevy Corvette, the GMC Hummer EV SUV and the Cadillac Celestiq. The latter two are fully electric vehicles, so they would be unaffected by the imported vehicle tariff.

The backdrop to these developments includes GM’s efforts to regain its foothold in the Chinese market. As highlighted by GM President Mark Reuss, the company is leveraging its joint ventures and new product offerings, such as the all-electric Buick Electra E4 and E5, as well as the Cadillac Lyriq and Optiq, to enhance its market position. All these EVs are built locally in China.

GM recently announced a shift in its electrification strategy with plans to reintroduce plug-in hybrid electric vehicles (PHEVs) to the North American market. Although GM offers PHEV technology in China, the automaker does not plan to import PHEV models to the U.S.

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Jonathan is an automotive journalist based out of Southern California. He loves anything and everything on four wheels.

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Comments

  1. Can you get that blue on a Tahoe here?

    Reply
    1. Maybe…
      How many extra zeroes can you put on that check?

      Reply
  2. 2.5L is big!?! 😳 I’ve always considered anything under 4 small.

    Reply
    1. Anything under 455 is a small block……

      Reply
  3. 95% of the vehicles GM sells in China are built in China with non-union labor.
    Funny the UAW is never upset by that…
    They will blow up Detroit if a GM vehicle is built with non-union labor INSIDE the US.

    Reply
    1. Try Google before commenting.
      There are no unions in China…or one could consider everyone is in a union in a communist controlled economy. Either way, not really something UAW can get upset about. Nor should they as they don’t impact their rank and file.

      Reply
      1. We need reciprocal tariffs on all Chinese imports.

        Reply
  4. Sooner or later GM will pay the price for doing business with China, take that to the bank!

    Reply
  5. That’s just like the luxury tax the idiot government in Canada has slapped on us!

    Reply

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