Washington Might Block Chinese Automaker From Entering U.S.
At this year’s Detroit Auto Show, Chinese automaker GAC Motor announced plans to begin selling cars in the U.S. in 2019. The goal is to sell a redesigned version of the GS8 SUV (shown above) as a 2020 model and then slowly fill out its lineup over the next several years. But while GAC sounds like it knows breaking into the U.S. won’t be easy, it may have underestimated how much resistance it will face from Washington.
Reuters reports that yesterday, Senate minority leader Chuck Schumer called the rules for exporting cars to China “manifestly unfair, and a typically unfortunate example of China’s rapacious trading policies.” That’s because if a car is built in China and sold in the U.S., it is subject to a 2.5-percent tariff, but if a car is built in the U.S. and sold in China, the tariff is 10 times higher at 25 percent.
In a separate interview, President Trump told Reuters he felt the same way. He believes “we have helped to build China because they have taken out so much money in terms of trade deficits with this country,” and that “when China or another country charges us 50 percent tariffs—more than that in some cases—and we charge them nothing, that’s not fair. That’s not fair.”
While Trump and Schumer appear to agree that China’s tariffs on U.S. goods are unfairly high, it’s not entirely clear what they plan to do about it. At the moment, neither has called for an increased tariff on Chinese cars or proposed a way to block GAC from selling vehicles in the U.S. But considering how little Trump and Schumer agree on, the fact that they’re on the same side of this particular issue could be bad news for GAC.
We’ve reached out to senator Schumer’s office and the White House for comment, and are awaiting their replies.