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The Trump administration has denied a General Motors Co request for an exemption to a 25 percent U.S. tariff on its Chinese-made Buick Envision sport utility vehicle.

WASHINGTON: The Trump administration has denied a General Motors Co request for an exemption to a 25 percent U.S. tariff on its Chinese-made Buick Envision sport utility vehicle.

The denial of the nearly year-old petition came in a May 29 letter from the U.S. Trade Representative's office saying the request concerns "a product strategically important or related to 'Made in China 2025' or other Chinese industrial programs."

The midsize SUV, priced starting at about US$35,000, has become a target for critics of Chinese-made goods, including leaders of the United Auto Workers union and members in key political swing states such as Michigan and Ohio.

GM said it was aware of the denial and has been paying the tariff since July. GM has not raised the sticker price to account for the tariff. </s> The U.S. Trade Representative has denied a request by Volvo Cars for an exemption to 25 percent tariffs imposed on Chinese-made vehicles that are imported to the United States.

The denial came in a May 29 letter, according to news reports. Volvo had been seeking an exemption for its XC60 SUV.

The ruling is a moot point for Volvo because the automaker has already moved XC60 production for the U.S. market to its plant in Torslanda, Sweden.

The tariffs are on hold while China and the U.S. continue talks over trade disagreements.

Volvo had piggybacked on a similar request by General Motors for its Buick Envision sport-utility vehicle. U.S. officials also denied an exemption in that case.

The mid-size XC60 is one of Volvo's top sellers in the United States, with 11,758 units sold through the first five months of this year — a 4.6% increase over 2018. The vehicle is second only to the larger XC90 in terms of U.S. sales.

Volvo builds its S60 sedan at a $1.1 million manufacturing campus off Interstate 26 near Ridgeville. The automaker, based in Sweden and owned by China's Geely Holding Group, plans to add production of the XC90 at the Charleston-area plant by 2021, when employment at the site is expected to top 4,000 people. </s> WASHINGTON/STOCKHOLM (Reuters) - The United States has rejected separate requests from General Motors Co and Chinese-owned Volvo Cars for an exemption to a 25% U.S. tariff on their Chinese-made sport utility vehicle models.

FILE PHOTO: The GM logo is seen at the General Motors plant in Sao Jose dos Campos, Brazil, January 22, 2019. REUTERS/Roosevelt Cassio

GM, the largest U.S. automaker, and Sweden’s Volvo both said they were aware of the respective denials of their nearly year-old petitions. Both companies had not raised the sticker price to account for tariffs, which came into play last July.

The denial of GM’s petition for its Buick Envision came in a May 29 letter from the U.S. Trade Representative’s office saying the request concerned “a product strategically important or related to ‘Made in China 2025’ or other Chinese industrial programs.”

The midsize SUV, with a starting price of about $35,000, has become a target for U.S. critics of Chinese-made goods, including leaders of the United Auto Workers union and members in key political swing states such as Michigan and Ohio.

Buick Envision sales fell in the United States by nearly 27% to 30,000 last year and fell another 21% in the first three months of 2019.

Only a small number of vehicles are built in China and sold in the United States.

Last month, the U.S. Trade Representative’s Office also rejected a request by Volvo Cars for its mid-size XC60 SUVs, its top selling U.S. vehicle.

Volvo, which is owned by China’s Geely, had already last year begun switching production of U.S.-bound XC60s from China to Europe as part of a global shake up of production plans for most of its lineup in an effort to dodge tariffs.

A spokeswoman said the XC60 shift, Volvo’s biggest move to mitigate the impact of tariffs, was completed in the Spring, meaning Volvo was no longer paying tariffs on XC60 imports and would not see any fresh cost impact due to the rejection.

Volvo had argued in its exemption request that it could “anticipate” the XC60 would be eventually produced in its recently opened South Carolina plant, where it is building S60 sedans, but the spokeswoman said no decision had been taken.

“(New production setup) is a cost so that would of course depend on the permanence of tariffs and what the situation looks like going forward. It’s a continuous evaluation that we always do with the flexible manufacturing footprint,” she said.

Besides the shift, Volvo has also split production of its S60 luxury sport sedan between the two countries; altered some European production plans; and reduced shipments of its S90 sedan, which is only produced in China, to the United States.

U.S. retail sales for the S90 sedan this year to May were down 63.7 percent year on year, company data showed.

GM had argued in its request that Envision sales in China and the United States would generate funds “to invest in our U.S. manufacturing facilities and to develop the next generation of automotive technology in the United States.”

FILE PHOTO: General Motors Co. displays its U.S. version of the Buick Envision crossover, the first China-built car imported to the U.S. by a Detroit automaker, during a media event before the start of the North American International Auto Show in Detroit, Michigan, January 10, 2016. REUTERS/Rebecca Cook

GM said last year the “vast majority” of Envisions, about 200,000 a year, are sold in China.

Because of the lower U.S. sales volume, “assembly in our home market is not an option” for the Envision, which competes with such mid-size crossover vehicles as the Jeep Grand Cherokee and the Cadillac XT5.

Ahead of the July 2018 start for higher import tariffs, GM shipped in a six-month supply of Envisions at the much lower 2.5 percent tariff rate, Reuters reported in August 2018. </s> WASHINGTON (Reuters) - The Trump administration has denied a General Motors Co request for an exemption to a 25 percent U.S. tariff on its Chinese-made Buick Envision sport utility vehicle.

The denial of the nearly year-old petition came in a May 29 letter from the U.S. Trade Representative’s office saying the request concerns “a product strategically important or related to ‘Made in China 2025’ or other Chinese industrial programs.”

The midsize SUV, priced starting at about $35,000, has become a target for critics of Chinese-made goods, including leaders of the United Auto Workers union and members in key political swing states such as Michigan and Ohio.

GM said it was aware of the denial and has been paying the tariff since July. GM has not raised the sticker price to account for the tariff. </s> Washington/Stockholm — The US has rejected separate requests from General Motors (GM) and Chinese-owned Volvo Cars for an exemption to a 25% US tariff on their Chinese-made SUV models.

GM, the largest US vehicle maker, and Sweden’s Volvo both said they were aware of the respective denials of their nearly year-old petitions. Both companies have not raised the sticker price to account for tariffs, which came into play last July.

The denial of GM’s petition for its Buick Envision came in a May 29 letter from the US trade representative’s office saying the request concerned “a product strategically important or related to ‘Made in China 2025’ or other Chinese industrial programmes”.

The mid-size SUV, with a starting price of about $35,000, has become a target for US critics of Chinese-made goods, including leaders of the United Automobile Workers union and members in key political swing states, such as Michigan and Ohio.

Buick Envision sales fell in the US by nearly 27% to 30,000 in 2018 and fell another 21% in the first three months of 2019. Only a small number of vehicles are built in China and sold in the US.

In May, the US trade representative’s office also rejected a request by Volvo Cars for its mid-size XC60 SUVs, its top selling US vehicle.

Volvo, which is owned by China’s Geely, already began switching production of US-bound XC60s from China to Europe in 2018 as part of a global shake up of production plans for most of its line-up in an effort to dodge tariffs. </s> The GM logo is seen at the General Motors plant in Sao Jose dos Campos

WASHINGTON (Reuters) - The Trump administration has denied a General Motors Co request for an exemption to a 25 percent U.S. tariff on its Chinese-made Buick Envision sport utility vehicle.

The denial of the nearly year-old petition came in a May 29 letter from the U.S. Trade Representative's office saying the request concerns "a product strategically important or related to 'Made in China 2025' or other Chinese industrial programs."

The midsize SUV, priced starting at about $35,000, has become a target for critics of Chinese-made goods, including leaders of the United Auto Workers union and members in key political swing states such as Michigan and Ohio.

GM said on Tuesday it was aware of the denial and has been paying the tariff since July. GM has not raised the sticker price to account for the tariff.

Buick Envision sales fell in the United States by nearly 27% to 30,000 last year and fell another 21% in the first three months of 2019.

Only a small number of vehicles are built in China and sold in the United States.

Last month, the U.S. Trade Representative's Office also denied a request by Chinese-owned Volvo Cars for tariff exemptions for mid-size SUVs assembled in China after the automaker sought an exemption for the XC60, its top selling U.S. vehicle.

GM, the largest U.S. automaker, argued in its request that Envision sales in China and the United States would generate funds “to invest in our U.S. manufacturing facilities and to develop the next generation of automotive technology in the United States.”

GM said last year the “vast majority” of Envisions, about 200,000 a year, are sold in China.

Because of the lower U.S. sales volume, "assembly in our home market is not an option" for the Envision, which competes with such mid-size crossover vehicles as the Jeep Grand Cherokee and the Cadillac XT5.

Ahead of the July 2018 start for higher import tariffs, GM shipped in a six-month supply of Envisions at the much lower 2.5 percent tariff rate, Reuters reported in August 2018. </s> SHANGHAI/BEIJING (Reuters) - China will steeply cut import tariffs for automobiles and car parts, the country’s finance ministry said on Tuesday, opening up greater access to the world’s largest auto market amid an easing of trade tensions with the United States.

Import tariffs will be cut to 15 percent for most vehicles from 25 percent from July 1, the Ministry of Finance said in a statement, adding this was part of efforts to open up China’s markets and spur development of the local auto sector. A small number of imported trucks are taxed at 20 percent currently.

China pledged last month to open up its auto market, announcing a timeline to remove long-standing caps on foreign ownership of automotive ventures and saying it would cut tariffs on imported cars soon.

The move will boost overseas carmakers, especially those that import premium-end cars to China such as Germany’s BMW (BMWG.DE), electric car maker Tesla Inc (TSLA.O) and Daimler AG’s (DAIGn.DE) Mercedes-Benz.

Import tariffs for auto parts would be cut to 6 percent from mostly around 10 percent, the ministry said.

China’s high tariff on vehicles - versus a 2.5 percent U.S. levy - has been a key focus of U.S. President Donald Trump’s administration amid a simmering trade standoff between Washington and Beijing.

Trump has said previously the 25 percent tariff amounted to “stupid trade”, while auto industry leaders such as Tesla’s Elon Musk have said that Chinese restrictions on foreign auto makers created a skewed playing field.

China and the United States, however, made a breakthrough in trade talks after negotiations in Washington last week, stepping back from the brink of a global trade war and agreeing to hold further talks to boost U.S. exports to China. </s> China announced Tuesday that it would cut tariffs on auto imports from July 1, the latest sign of a thaw in trade frictions with the United States.

Beijing has announced a flurry of trade liberalisations and reforms since coming under fire from the Trump administration and some European politicians for its protectionist policies.

The planned reduction in import duties from 25 percent to 15 percent is a boon for international automakers but may fall short of fulfilling US President Donald Trump's expectations that Beijing match US tariffs of 2.5 percent.

Demands reportedly put to China by the United States at the start of trade talks called on it to lower all tariffs to at least match those of the US.

Trump has been following the issue closely and on Monday tweeted, "On China, Barriers and Tariffs to come down for first time."

The announcement in Beijing came days after Vice Premier Liu He and US Treasury Secretary Steve Mnuchin led negotiations in Washington which ended with an agreement to pull back from the brink of a trade war.

The two sides agreed to refrain from imposing tariffs threatened on billions of dollars' worth of goods that would have dented US-China trade.

But the Trump administration has been split on the issue, with some members of the negotiating team saying the tariffs could still be imposed.

On Tuesday China's foreign ministry spokesman Lu Kang said the US would send a high-level delegation to China to hold "detailed conversations" at an unspecified date.

President Xi Jinping announced in April that China would "considerably lower" tariffs on cars by the end of the year as part of a range of measures seen as an olive branch to Trump.

The cut to 15 percent will likely be welcomed by automakers selling cars in China, with Toyota importing its Lexus brand and American giant Ford shipping in most of its Lincolns.

The announcement also included a lowering of import duties on many types of auto parts.

Earlier this year China also announced plans to liberalise foreign ownership limits which had forced most foreign carmakers into joint ventures with state-owned companies.

China currently restricts foreign auto firms to a maximum 50 percent ownership of such joint ventures.

The changes will scrap shareholding limits for new-energy vehicle firms as soon as this year, followed by commercial vehicles in 2020 and passenger cars in 2022. </s> Crowds at the first public opening day of the Beijing car show on April 27, 2018. China imported 1.22 million vehicles last year, or about 4.2 per cent of the country's total sales of about 28.9 million vehicles.

CHINA will cut the import duty on passenger cars to 15 per cent, boosting car makers such as BMW AG and Ford Motor Co just as the immediate threat of a trade war with the US recedes.

The Finance Ministry said on Tuesday the levy will be lowered effective July 1 from the current 25 per cent that has been in place for more than a decade. Bloomberg News had reported last month that China was weighing proposals to reduce the car import levy to 10 per cent or 15 per cent.

A reduction in import duty follows a truce between US President Donald Trump's administration and Chinese officials as they seek to defuse tensions and avert an all-out trade war. While the levy reduction could be claimed in some quarters as a concession to Mr Trump and will be a boon to US carmakers such as Tesla Inc, the move will also end up benefiting European and Asian manufacturers from Daimler AG to Toyota Motor Corp.

The latest round of tariff easing is part of a flurry of policy announcements in recent months aimed at demonstrating China's commitment to opening the economy - partly in response to the accusations of protectionism levelled by the Trump administration. Beijing has also pledged to slash ownership limits in the car sector as well as in banking, and last November reduced import tariffs on almost 200 categories of consumer products.

The import duty on car parts will be reduced to 6 per cent, the Finance Ministry said.

China announced on May 18 that it would end its anti-dumping and anti-subsidy investigation into imports of US sorghum, citing "public interest". That move, coupled with recent steps including restarting a review of Qualcomm Inc's application to acquire NXP Semiconductors NV, signal a conciliatory stance from the Chinese side.

President Trump retreated from imposing tariffs on billions of dollars worth of Chinese goods because of White House discord over trade strategy and concern about harming negotiations with North Korea, according to people briefed on the administration's deliberations.

Treasury Secretary Steven Mnuchin said on Sunday that the administration's plan to impose tariffs had been suspended, and Mr Trump said on Twitter on Monday that the Chinese had agreed to purchase unspecified amounts of American farm products.

China imported 1.22 million vehicles last year, or about 4.2 per cent of the country's total sales of about 28.9 million vehicles. At the Boao Forum in April, President Xi Jinping reiterated China's commitment to reduce import tariffs on vehicles.

Of the US$51 billion of vehicle imports in 2017, about US$13.5 billion came from North America including sales of models made there by non-US manufacturers like BMW.

China imported 280,208 vehicles, or 10 per cent of total imported cars, from the US last year, according to China's Passenger Car Association, an industry trade body.

A duty cut would typically benefit luxury carmakers or manufacturers, like Tesla, that don't have a local production site. Most carmakers produce mass-market models in China.

For Tesla, a tariff cut will provide a boon until the company manages to set up local production. The Palo Alto, California-based company has been working with Shanghai's government since last year to explore assembling cars in China. China's announcement by Beijing that it will allow foreign new-energy vehicle makers to fully own car factories as early as this year removed the primary hurdle in the way of founder and billionaire Elon Musk.

Luxury sales leader Audi, part of Volkswagen, has been making cars in China since 1990s. General Motors Co's Cadillac, which has relegated Lexus to fifth in the luxury-car rankings, opened a factory in Shanghai in 2016.

High-end cars will feel the effects of a tariff cut because less of their production has moved locally. For example, Toyota's Lexus would benefit as the only premium Japanese marque that doesn't manufacture in China or hasn't announced plans to do so.

Foreign carmakers have long pleaded for freer access to China's car market, while its own manufacturers are expanding abroad. In April, China announced a timetable to permit foreign carmakers to own more than 50 per cent of local ventures. BLOOMBERG
The United States rejects separate requests from General Motors and Chinese-owned Volvo Cars for an exemption to the new 25 percent tariffs on their Chinese-made sport utility vehicle models.