New Tariffs Hit U.S. Auto Exports To China

New tariffs on American auto exports came into effect on Thursday, hitting a vehicle export market worth nearly $4 billion USD.

Vehicles affected include SUVs and other large vehicles such as the Cadillac Escalade, made by General Motors Co, and the Jeep Grand Cherokee from Chrysler Group LLC. Their prices will rise by as much as 22 percent. This comes on top of existing duties as high as 25 percent.

GM, along with most American car-makers, had set up joint-ventures and factories in China, whose products are unaffected by the tariffs—which may mean shifting even more production to China than the companies have already done.

Some doubt the effect that the tariffs will have on actual sales, as most buyers of these vehicles are well-off enough not to be deterred by the rising prices.

[Liu Hongyan, Cadillac Buyer]:
"I think it doesn't really affect people of our class and status who buy these types of cars. Because the tariff rate only takes up a small percentage of the cost. If you like the car it doesn't matter."

Nonetheless, in an increasingly shaky global economy, some take the view that every cent matters.

Four senior lawmakers in the House of Representatives also urged USTR (U.S. Trade Representative) to take action, calling the duties "unjustifiable" and "one more instance of impermissible Chinese retaliation against the United States and other trading partners".