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Ford and General Motors Assessing Tariffs Impact in China

08 July 2018

At the same time, China is planning a retaliation of its own with tariffs targeting $34 billion in soybeans, cars and other products imported from the U.S.

That took sales for the first half of the year to 400,443 vehicles, down 25 percent from the same period a year ago.

Ford Motor's (F.N) China slump intensified, with vehicle sales tumbling 38 percent in June and the automaker recording its worst-ever first half, as buyers shunned its aging models that are awaiting overhauls and flocked to rivals.

"China will not bow in the face of threats and blackmail, nor will it be shaken in its resolve to defend global free trade", said Gao Feng at a news conference.

Fleet has previously said Ford's sales will not likely regain momentum in China, the world's biggest auto market, until next year when the first of new vehicle models arrive in showrooms in large enough numbers.

After the Trump administration announced imposing tariffs of 25 percent on steel and 10 percent on aluminum imports in March, China said it would impose $3 billion worth of tariffs, between 15 to 25 percent, on 128 American goods. "However, Ford would be more exposed to higher tariffs on its exports to China and increased costs in North America if tariffs are implemented".

For now, trade tensions seem to be softening between the USA and Europe, but analysts say Ford investors should be more anxious about the US trade war with China.

"We always knew it would be a challenging year for us given our position in the product cycle", Peter Fleet, head of Ford's Asia-Pacific operations, which include China, said in a statement. Those new duties are bad news for Ford, which shipped roughly 80,000 vehicles to China previous year.

Other firms that export USA -made cars to China include BMW (BMWG.DE), Daimler AG's (DAIGn.DE) Mercedes and Tesla (TSLA.O).

China is General Motors Co's (GM.N) largest market. A GM spokesman said that aside from a very small number of Chevrolet Camaro cars, virtually all of its vehicles and parts are made in China.

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. It is not a solicitation to make any exchange in commodities, securities or other financial instruments.

Ford and General Motors Assessing Tariffs Impact in China