German automaker BMW stated it will increase the costs of two U.S.-made crossover sport-utility vehicles in China to deal with the additional expense of tariffs on U.S. vehicle imports into the world’s biggest auto market.
In a move due to take effect on Monday, BMW stated over the weekend that it will boost maker-suggested retail costs of the popular, relatively high-margin X5 and X6 SUV models by 4 percent to 7 percent.
The costs of increase tells that BMW is willing to absorb much of the higher expenses stemming from bringing the SUVs to China from its factory located in South Carolina, underscoring the fierce rivalry among luxury car brands in China.
BMW’s move comes following China’s imposition of new tariffs earlier this month on about $34 billion of U.S. imports, from soybeans and cars to lobsters, as part of a broadening trade row.
Beijing, which this year slashed tariffs on all automobiles imported into China, slapped an extra 25 percent levy on U.S.-made vehicles as of July 6. As a result, China now levies a 40 percent import duty on all vehicles imported from the United States.
“BMW stands for free (trade) but can’t stand still without taking actions to respond to the market changes,” a BMW spokeswoman stated in an email to Reuters.