The global car industry is facing major upheaval after US President Donald Trump imposed a 145 percent tariff on Chinese imports in early April – the highest so far in the US-China trade dispute.
The tariffs, which apply to dozens of countries including US allies, aim to protect American manufacturing. But they are also making car production and trade more expensive and complicated, especially for automakers and consumers in the US and China.
Bill Russo, CEO of Automobility, a Shanghai-based think tank, said the auto industry has long depended on large, low-cost markets, with China at the centre. He said the new tariffs disrupt this model by raising costs and making it harder for companies using cheaper Chinese production to stay competitive.
US automakers and consumers are likely to face higher costs, he said, while Chinese carmakers will be less affected because they do not rely heavily on the US market.
The US tariffs are also likely to change how the European Union deals with China.
While the EU has already imposed its own tariffs on Chinese goods, mainly electric cars, Beijing and Brussels are now more likely to work together in response to Washington’s “America First” approach.
EU votes to impose tough new tariffs on Chinese electric vehicles
