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Trump Blasts “Stupid Trade” with China
President Donald Trump complains that continuing to tolerate China’s 25% tariff on cars from the U.S. would be “stupid trade.”
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President Donald Trump complains that continuing to tolerate China’s 25% tariff on cars from the U.S. would be “stupid trade.”
He points out that the U.S. collects a tax of only 2.5% on imported vehicles, including those coming from China. “Does that sound like free or fair trade?” he tweets. “No, it sounds like stupid trade.”
Trump is escalating pressure on China, in large part because of the country’s policy of demanding that foreign companies turn over intellectual property in exchange for the right to do business there. Last week he announced plans to impose tariffs worth at least $50 billion on Chinese goods, then threatened to triple that amount.
Chinese brand cars aren’t yet being exported to the U.S. But Guangzhou Automotive Group has begun scouting dealers to support its entry into the American market next year.
Volvo and General Motors both are importing modest volumes of Chinese-made cars and crossovers now. Ford said last June that it plans to source future Focus small sedans from China beginning next year.
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China and U.S. OEMs
When Ford announced its 3rd quarter earning on October 24, the official announcement said, in part, “Company revenue was up 3 percent year over year, with net income and company adjusted EBIT both down year over year, primarily driven by continued challenges in China.” The previous day, perhaps as a preemptive move to answer the question “If things are going poorly in China, what are you doing about it?, Ford announced that it was establishing Ford China as a stand-alone business unit.