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Thursday, November 24, 2016

China May Retaliate To Trump's Proposed Tariffs, Hurt U.S. Car Industry

An op-ed published in China’s Global Times suggests that if Donald Trump imposes a 45 per cent tariff on imported Chinese goods, the Asian nation may take countermeasures, potentially impacting the U.S. automotive market.

During his successful campaign, President-elect Trump asserted a 45 per cent tariff would be applied to imported goods from China. The maximum tariff permitted under U.S. law is 15 per cent across all imported goods, but could reach the 45 per cent mark proposed by Trump if applied to individual commodities, such as cars.

The piece asserts that a “tit-for-tat approach” could be adopted by China where it would hit imported goods from the U.S. with high tariffs, including vehicles and technology products like iPhones.

Millions of American-made vehicles are sold in China every year. In fact, General Motors sold 2.37 million units in China through August 2016 and Ford is on track to again surpass 1 million sales in the country.

In spite of the majority of vehicles being manufactured locally, via conglomerates formed with Chinese companies, if the government were to impose harsh tariffs, it's not easy to quantify the negative effect this would have on the American automotive industry.


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