CHINA: GENERAL MOTORS Spread NEW MODELS OF VEHICLE
If trade in the United States with China is so unfair, why GM bestselling car there.
Are the two largest economies in the world finally come to a fight on the price of cars.
Before a summit at the highest stakes with the Chinese leader Xi Jinping, the White House Donald Trump said he is not happy with the high rate of China on US cars imported These contribute, it is said, total trade deficit of the United States with China, which was 347 billion last year former economic adviser Larry Summers Obama also raised the issue at a recent meeting with Prime paywall of China, Li Keqiang.
While US imported cars and car taxes pieces to a maximum of 2 5, imposes rights between China 21 and 30. This gives foreign manufacturers who want to sell in China a large production incentive there to avoid fees imports, but China also requires foreign subsidiaries to operate as a 50-50 joint ventures with Chinese companies These, of course, then become classrooms for Chinese engineers to acquire know-how abroad.
It is not exactly the definition of anyone of fair trade, but there is a logic to the situation The system came into play in 2001, after China joined the World Trade Organization At the time, Chinese industry was much more the idea behind America's is that future WTO negotiations cycles reduce trade barriers in China further, but global trade talks have stagnated completely.
Ironically, therefore, this unfair situation for America is a product of trips of globalization, not inflexible in March before the administration of Trump And he portrayed as attempting to persuade China to drop its protections will now come from the more protectionist US administration in recent memory.
To complicate everything Now that China is the world's largest auto market, US companies are reluctant to complain too much about the rules askew for fear of being completely cut US companies and their joint ventures have a significant market share .
Witness the latest annual report of General Motors, which sells more cars in China 3 9 million in the United States 3 million and saw its business grow China last 13 years, one in 10 cars sold in China was GM of good relations with our joint venture partners, who are affiliated to the Chinese government, is an important part of our growth strategy in China, the Ford report, meanwhile, won May 1 billion in China last year, and estimates that 4 2 market.
However, trade data indicate that high tariffs aren t much of an obstacle to direct car sales; what matters is the quality of Chinese car sales in the US, while growing, are still lower because the Chinese cars often don t meet US standards, while exports of American automobiles to China nearly doubled between 2012 and 2014, before slipping again in the last two years on this measure, the United States has a car trade surplus with China, not a deficit.
Factoring in the entire global supply chain, not only cars, but auto parts and body makes the picture looks different American companies take advantage of low prices to import auto parts made in China before finishing in cars US or Mexico Even with all that trade, though, the US deficit was only 418 million last year and, under the current regime, the gap decreases during the past five years, total exports of the US auto industry to China increased 65; Chinese exports to the US increased 59.
These figures reflect the fact that for automakers from the United States, like other US multinationals, the workpieces abroad, where costs of labor are much lower, can reduce costs and increase profits They are probably tempted to follow the example of high-tech companies such as Apple and move more of their manufacturing overseas, but it would have to incur the wrath of political and economic unions that dominate their labor of American work.
There is also the issue of delivery The final assembly is often done in the market where cars are sold to save on transportation costs in common as cars filled are bulky These costs are a result of other manufacturers foreign automakers, such as Volkswagen and Toyota, have set up factories in the United States, despite the low tariffs on American auto imports.
But even if they were willing to take more political heat for moving jobs overseas, US automakers would like more flexible rules about profit and the information they must share with their Chinese partners beforehand.
US lawmakers to ALL bands shall hear both workers and investors say that aren t just rules and push the president to find a trade regime that will attract more investment and more jobs to the US side of the chain supply, but it is not clear what they'll have leverage, with Japanese, Korean and European manufacturers compete for market access, too.
For the Chinese, meanwhile, US automakers success in their countries, despite high tariffs and joint venture rules reinforce the need for such protection; no doubt, the Chinese auto industry would be even more vulnerable without After all, there are no Chinese car brand that dominates the US like General Motors does in China.
The Obama administration had hoped that the Trans-Pacific Partnership could give more negotiating power with China, opening the Malaysia and Vietnam in car sales in the US US automakers have rejected the agreement because " it also gave the countries of Japan and other more access to the US market in any case, Trump fired the United States on the agreement shortly after taking office, but it remains a challenge WTO against China for subsidizing pending auto parts manufacturers, and this place may be where focus their ire nationalist trade negotiators of the new administration.
If the new administration listens to US companies because they usually have advice may be well tread lightly; you have already been warned We do not want to see a trade war would break out between the two countries, Li, the Chinese premier, said earlier this month that would not make our fair trade.
If trade in the United States with China is so unfair why GM's best-selling car there, Trade, China, unfair.