Guangzhou Automobile Group Co Ltd (GAC) on Wednesday stated a brewing trade war between China and the United States could damage the Chinese automaker’s strategies to enter into the U.S. market if tariff barriers were raised.
Feng Xingya, GAC Group president, informed reporters at the Beijing auto show that boosted U.S. tariffs on imported Chinese vehicles would have a major impact on its strategies to enter into the United States by 2019.
In a standoff over trade, the U.S. government has stated it could add a 25 percent tariff to about 1,300 products from China, consisting of gasoline- and electric-powered motor vehicles. China levies a comparable tariff presently on imported U.S. cars.
“If the United States really levies a 25 percent tariff, it would have major impact on us. We are now doing studies on our price competitiveness and profit potential (after any tariff increase),” Feng stated at largest show of Asia.
Chinese automakers export relatively little foreign markets such as the United States, but automakers like GAC and Volvo cars-owner Geely Automobile Holdings are progressively looking abroad.
In 2017, GAC Group and subsidiary GAC Motor introduced its Trumpchi brand at the Detroit auto show, though it subsequently thought about changing the name for the American market because of its unintended similarity to the name of U.S. President Donald Trump.
Feng added that the specter of tariffs made the present climate threatening for all Chinese firms looking for business in the United States.
There is wide hope that China and the United States can agree with an agreement on trade to avert the potential of extra tariffs. Otherwise, China is ready to retaliate with its own list of tariffs on U.S. products.
Trump on Tuesday stated the United States would probably reach a trade agreement with China and that authorities from both sides would meet for negotiations.
