by China’s ascent in the US car market could be stopped short by new tariffsUS President Donald Trump has shown a particularly strong interest in the US car industry – which carries both significant symbolic and political weight – and therefore in trade flows of foreign cars into the US. The recently negotiated trade agreement with Mexico is mostly about car manufacturing, particularly aimed at halting the ongoing displacement of US car production to Mexico. And Trump’s grievances against Europe have mostly revolved around the alleged imbalance in car trade flows, particularly with Germany, and the fact that the European Union has higher import tariffs than the US on imported cars. A meeting with the EU Commission in July put a (temporary?) truce on that front. Trump conspicuously omits
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Thomas Costerg considers the following as important: Macroview, US car sales, US import tariffs, Us imports
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China’s ascent in the US car market could be stopped short by new tariffs
US President Donald Trump has shown a particularly strong interest in the US car industry – which carries both significant symbolic and political weight – and therefore in trade flows of foreign cars into the US. The recently negotiated trade agreement with Mexico is mostly about car manufacturing, particularly aimed at halting the ongoing displacement of US car production to Mexico. And Trump’s grievances against Europe have mostly revolved around the alleged imbalance in car trade flows, particularly with Germany, and the fact that the European Union has higher import tariffs than the US on imported cars. A meeting with the EU Commission in July put a (temporary?) truce on that front. Trump conspicuously omits mention of the extent of European brand production based in the US.
The trade relationship with China is now in Trump’s crosshairs, and it is without surprise that cars made in China (including for US brands) were included in the first batch of tariffs on China released in June – targeting USD 50 billion of imported goods, at a 25% tariff rate. The most recently imposed tariffs – at a 10% rate – expanded that net to a further USD 200 billion. These new tariffs include many car parts made in China, such as tyres or engines.
Until this summer, China had actually made strong inroads into the US car market having, in the January to July period, overtaken South Korea’s place as the 5th largest source of car imports. Mexico remained the top import country with imports from Mexico up 7.3% in the January-July period, while those from Canada were down 5.6%, and from Germany down 7.9%.
