AutoBeta(AutoBeta.net)08/27 Report--

Since the US government announced in May that the second tariff rate would be raised from 10 per cent to 25 per cent, China has resumed its decision to impose tariffs on US-made cars and spare parts in order to defend the multilateral trading system and its legitimate rights and interests. With effect from 12:01 on December 15, 2019, tariffs on cars and parts originating in the United States will resume at 25 and 5 per cent, meaning tariffs on imported cars made in the US will be as high as 40 per cent.

In the face of trade frictions, Trump even said directly on Twitter: "We do not need China, I now order that our great American companies immediately stop buying from China and return to the United States." It can be seen that Trump's original intention is to use this pressure policy to "guide" investment back to the United States.

As the single market with the largest sales volume in the world, China's auto market is very popular for any auto company. A Chinese auto market with annual sales of 28 million vehicles is also the global core market for American brands such as Ford, GM and Tesla. Can it really break away from the Chinese market?

GM sold 3.64 million vehicles in China in 2018, generating nearly $2 billion in revenue, accounting for 41.5 per cent. GM will also invest more in China in the future. In the new energy vehicle sector, GM plans to launch at least 10 new energy vehicles in China between 2016 and 2020, and double the total number of new energy vehicles launched in China between 2021 and 2023.

Tesla signed an agreement to build the plant in July last year and has obtained a comprehensive acceptance license by August this year, which is further approaching the time for formal production.

At present, Ford has many products exported to China, including Ford and Lincoln, among which Lincoln are imported models. In the second half of this year, the first luxury SUV Lincoln Corsair will be produced in China, and the new model will be produced at Changan Ford's plant. With the promotion of localization, the pressure of tariffs may be alleviated, but it will still be dominated by imports in the short term.

In addition, for the American-made models currently sold in China, after raising tariffs for the first time last year, car companies such as Mercedes-Benz, BMW and Tesla have had to raise the prices of some models. As a result, this helpless move will only affect the sales of these imported cars and increase their own costs.

The tariff problem is causing more damage to the US auto industry, and the number of cars exported from the United States to China has fallen sharply, which will further reduce the employment opportunities of American auto workers.

He hopes to use threats to force automakers to withdraw their investment from China, return to the United States to build factories and revive the U. S. economy. But for the Chinese car market, which sells 28 million vehicles a year, this is obviously not realistic.

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