China Levies 25 Per Cent Tariff On American Cars And Two Wheelers

Posted on: August 9, 2018, by :

With the on going trade war brewing between America – led by President Donald Trump and his Twitter account – and China, and with extra taxes and tariffs levied on Chinese imports into the United States, it was only a matter of tome till our northern neighbour responded in kind. China has now levied a 25 per cent tariff on all American cars and two wheelers sold in the country amongst a long list of other imports like oil, coal, asphalt, metal, etc. The overall tariff placed on American imports, which include cars, totals up to a whopping $16 Billion and is expected to kick in on August 23!

This is particularly troubling to all American automakers who have a large presence in China. Ford, General Motors and FCA all have considerable sales in China with their global and China specific models too. Automakers like GM also use China as a manufacturing base for their global cars and then import them into the United States. Recently, Ford too will soon be importing its entry level Focus hatchback from China into the US starting later this year.

A few months ago, General Motors actually put out a statement on the United States – China business relationship too. The statement read: ‘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. We continue to believe both countries value a vibrant auto industry and understand the interdependence between the world’s two largest automotive markets.’

According to reports, the United States exports about $10 Billion worth of new and used passenger cars to China (as of 2017) and the new tariffs could be detrimental to the industry especially considering the fact that China is the worlds largest auto consumer. The Trump administration has already lined up about $200 Billion more in tariffs and is actually considering going all out and taxing all the $500 Billion in imports that come into the United States from China every year.