Trump administration to study tools to raise U.S. tariffs on Chinese vehicles

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Last Wednesday, Robert Lighthizer, a US Trade Representative, announced his decision to examine all the resources to increase US tariffs on Chinese automotive and vehicles to match the 40% trade duties that China has been charging on the vehicles manufactured in the US.

Robert Lighthizer announced this in a statement that was harshly critical of the tariffs that China has been imposing on vehicles produced within the US. He described the tariffs are “egregious”, and further clarified that these actions are being taken at the orders of the President Donald Trump. This statement has issued a few days before the scheduled meeting between Chinese President Xi Jinping and President Donald Trump, which is to be held in Buenos Aires.

U.S tarrifs on chinese autos
Credit: Devdiscourse News

Needless to say, this upcoming meeting is being regarded as a highly anticipated political showdown that can either reduce or heighten the tensions that have engulfed the two largest economies of the world into a gripping trade battle. On both sides, tariffs and tax duties on vehicles are being imposed and heightened to counter the moves made by the other. Recently, the United States has made the decision of imposing 25% terrific on Chinese-manufactured autos, aside from the 2.5% tariff that is normally charged.

Amongst recent developments, China has allowed all other countries tax and tariff relaxations leading up to 15%, but in the case of the US-based vehicles, instead of reducing tariffs, it has increased the retaliatory tariff to an extra 25%. China has a limited exports to the United States. In 2017, it exported 53,300 autos to the market United States, while China imported 280,208 US-manufactured vehicles.

Carmarkers are busy rearranging the global product to cope with the heightening trade battle between the two largest economies of the globe. Volvo, which is currently owned by Geely, a Chinese car manufacturer, is planning to relocate most of its production units for its highly popular hot-seller, the XC60 SUV, for export to the US market to Torslanda in Sweden from its Chinese plant in Chengdu.

President Donald Trump and its administration is undertaking decisions that demand the state-driven economic measures of China to be changed. For instance, Trump administration demands new protective measures for US intellectual property, an abolition to their joint-venture guidelines, and greater accessibility for US-based organizations to enter the large market of China, along with an end to the industrial subsidies of China.

President Donald Trump has called out China and its aggressive state-driven economic and industrial policies, along with highlighting that drawbacks it causes to firms and producers in the US. The government is now taking measures to voice its disapproval and urge China to come to the discussion table and formulate a series of impactful reforms.

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