Automakers gearing up for Chinese tariffs

American Automotive Policy Council warns increase in tariffs “will undermine the enormous economic contributions the U.S. auto sector makes.”

   Automakers are preparing for the impact of a 25 percent tariff by the Chinese government on imported U.S.-built cars by this Friday in retaliation for the U.S. imposition of tariffs on Chinese imports, according to various news reports.
   This comes at the heels of a welcomed announcement for the U.S. auto industry on Sunday that the Chinese government would reduce its auto tariffs from 25 percent to 15 percent.
   “Trump’s tit-for-tat trade squabble with China threatens to undo years of lobbying by carmakers and drag Europe’s leading luxury brands into the fray,” Bloomberg reported. “Now the uncertain implications of a tariff whiplash are unnerving dealers and consumers in [China] where a record 24 million vehicles were sold last year.”
   Matt Blunt, president of the American Automotive Policy Council, in comments Friday related to the Commerce Department’s Section 232 investigation warned, “Despite the U.S. government’s good intentions, America’s automakers strongly believe any increase in automotive tariffs on passenger cars, light trucks and automotive parts will undermine the enormous economic contributions the U.S. auto sector makes to our economy and could interfere with the ongoing success of American automakers.”
   The Washington, D.C.-based association represents FCA US, Ford and General Motors on trade policy matters.
   “The imposition of a 25 percent tariff on autos and auto parts, on top of the Section 232 steel and aluminum import tariffs and the Section 301 tariffs on Chinese imports, would result in a total new tax burden of more than $90 billion annually on the U.S. automotive industry,” Blunt said.