China hits back with higher tariffs on U.S. cars, soybeans, oil
Washington — China will impose tariffs on $75 billion worth of U.S. goods, including cars, soybeans and oil in response to President Donald Trump's plans to levy tariffs on $300 billion worth of Chinese goods before the end of the year.
The new Chinese tariffs announced Friday are the latest volley in a burgeoning trade war that has shaken businesses in Michigan and other midwestern states, including Detroit's automakers. In addition to the new levies that take effect Sept. 1 and Dec. 15, China said it will resume a 25% tariff that was previously put on U.S. cars, and a 5% levy that will again be levied on auto parts and components.
“The tit-for-tat tariffs, absent any meaningful negotiations, are damaging to the American auto industry," said John Bozzella, CEO of the Association of Global Automakers, which lobbies for foreign-owned carmakers. "When these tariffs were initially imposed by China in 2017, American exports of finished vehicles dropped by 50%. "We can’t let that happen to American workers again. If those tariffs go back into effect and remain in effect, American jobs are at risk. There’s no question about that.
He said the United States exports more vehicles to China than China exports to the United States. "We have a chance to keep winning here," Bozzella said. "But a tariff fight sets this progress back.”
China says it is issuing the new tariffs in retaliation for a decision by President Trump to impose a 10 percent tariff on $300 billion worth of Chinese goods by the end of this year. The president has tried to calm fears about the trade war taking a toll on the U.S. economy by moving to delay until Dec. 15 some of the additional 10% tariffs on certain goods from China, including video game consoles, laptops, toys, shoes and clothing.
"The Economy is strong and good, whereas the rest of the world is not doing so well. Despite this the Fake News Media, together with their Partner, the Democrat Party, are working overtime to convince people that we are in, or will soon be going into, a Recession," Trump tweeted Friday morning.
Automakers have chafed under tariffs Trump has imposed on everything from foreign steel and aluminum, to thousands of Chinese components and materials.
General Motors Co. sold 3.64 million vehicles in China in 2018, while Ford Motor Co. sold more than 752,000 vehicles in China in 2018.
Among other automakers, Tesla Inc. and Germany’s Daimler AG and BMW AG are the most vulnerable to the additional levies.
BMW and Daimler ship large numbers of sport utility vehicles from plants in the U.S. to China, while Tesla doesn’t yet make its electric cars in the country. Six of the top 10 vehicles exported from the U.S. to the world’s biggest car market are from the two German brands, according to forecaster LMC Automotive.
Keith Laing of The Detroit News, with additional reporting by Bloomberg News.
Bloomberg News contributed.