×

Car manufacturers are concerned because the US wants to increase import taxes

Car manufacturers are concerned because the US wants to increase import taxes 5

Car manufacturers are concerned because the US wants to increase import taxes

According to the Wall Street Journal, shares of the world’s largest automakers including Volkswagen AG, Toyota Motor Corp, BMW AG and Daimler AG all fell on May 24, one day after the US Chamber of Commerce released a survey on

America protects the assembly industry

The poll also mentioned the conflict over tariffs on steel and aluminum, between the US and three close allies Japan, South Korea, and Germany.

The US Chamber of Commerce said the Trump administration could cite reasons to protect national interests to apply new taxes on imported cars and components.

The US move has a heavy impact on Germany, because Mr. Trump has repeatedly spoken out about this country’s car exports, as well as its heavy use of gas purchased from Russia and military expenses.

VW and many major German car companies will be affected if the new tax policy is approved.

Meanwhile, German authorities, where dozens of US military facilities are located, affirmed that trade barriers will not put pressure on finding new allies.

`China and Germany are committed to maintaining bilateral relations and agreeing on free and fair trade,` Merkel told reporters in Beijing.

The Trump administration has reached an agreement to amend free trade laws with South Korea.

Tariff barriers affect the entire industry

In contrast to the US, China will reduce import taxes on cars from 25% to 15%, starting from July 1, and reduce import taxes on components from 8% and 25% to 6%.

According to the Center for Auto Industry Research, 56% of vehicles sold in the US last year were domestically produced, while Canadian and Mexican origin accounted for about 22%.

`If the new tax policy is approved, many trade obstacles will appear and the auto market will fall into chaos,` Japanese Trade Minister Hiroshige Seko shared.

Japanese car manufacturers including Toyota and Nissan exported 1.7 million vehicles, worth about 41 billion USD, to the US last year.

Meanwhile, the European Union exported 1.2 million vehicles, worth $43 billion to the US, half of which were from German automakers such as VW, Audi, Porsche, BMW and Mercedes.

Japanese and German automakers have spent billions of dollars since 1980 to increase production capacity in the US and Mexico.

Mr. Trump has imposed a 25% steel and aluminum import tax on many close allies.

Car manufacturers are concerned because the US wants to increase import taxes

Toyota RAV4 is the best-selling SUV of the Japanese automaker in the US.

Meanwhile, German car manufacturers including VW, BMW and Daimler emphasized that they have invested in building many production facilities in the US, providing tens of thousands of jobs for people here, leading to a reduction in production costs.

The head of the German Chamber of Commerce and Industry said that the new tax policy could incur up to 7 billion USD in annual costs when exporting cars to the US.

High taxes are not entirely beneficial

According to analysts, the new tax policy may have the opposite effect on American manufacturers and customers.

About 25% of the 519,000 GM vehicles produced in Korea last year were exported to the United States.

Faced with the risk of new import taxes, Japanese car manufacturers have warned about the disadvantages Americans may face.

Car manufacturers are concerned because the US wants to increase import taxes

GM imports about 25% of the vehicles sold in the US.

Currently, Chinese car manufacturers only account for a small amount of cars imported into the US, however many world car manufacturers have factories here.

Tax policy on auto components and spare parts can have a more direct impact on Chinese companies.

Post Comment