Amid new tariffs on Chinese imports by the Trump administration, it’s unclear what will happen to cars and SUVs imported from the world’s most populous country. Actions Thursday by the U.S. Customs and Border Protection authorized immediate tariffs on 818 different Chinese product classifications worth some $34 billion per year. Trump’s new tariffs are a steep 25 percent, a tenfold increase versus the 2.5 percent levied against cars imported from China before Friday. These trade tariffs could have long-ranging effects for current and future cars from vehicle brands like Buick, Cadillac, Volvo and Ford.
The Envision is Buick’s third most popular model, behind only the Enclave and Encore SUVs in sales through the first half of this year. But its future — or, at least, the future of its price — is uncertain.
The SUVs “will be impacted by the new tariff, and were previously subject to the lesser tariffs,” spokeswoman Dayna Hart wrote in an email to Cars.com on Friday. Reached later by phone, Hart said GM is “still looking at [the situation] and evaluating scenarios and costs” regarding the Envision.
What could those increases look like? It’s hard to say. Kristin Dziczek, vice president of industry, labor and economics at the Michigan-based Center for Automotive Research, explained in June that tariffs are generally imposed before U.S. customs releases a car from its port of entry — in essence, between when it’s off the boat but not yet on a train or truck heading to dealerships.
“The trade tariff applies to the invoice [price], not to the purchase price, and the tariffs are calculated by whoever owns the product at that time,” Dziczek told Cars.com. “It could be the manufacturer. In the case of cars, it often is, but sometimes there are customs brokers that are bringing in other goods.”
The Envision is into its 2019 model year right now, and invoice prices range from $31,899 to $41,507. That means the import tariff alone could add some $8,000 to $10,000. Will General Motors pass any of that along to shoppers?
“At this point, there have been no decisions made regarding any price increases,” Hart said. Chinese-built cars account for “only around 1 percent of General Motors’ U.S. sales,” she added.
Cadillac CT6 Plug-In (No Longer Being Imported)
Other cars sold here also hail from China, albeit in limited or declining supply. Plug-in hybrid versions of the Cadillac CT6 sedan were built in China until recently, but parent company GM has stopped importing them. Cadillac spokesman Andrew Lipman said there was “no connection” between the new tariffs and GM’s decision, which he said the automaker made earlier. GM builds non-hybrid versions of the CT6 in Detroit. Could it build the CT6 Plug-In hybrid here, too?
“We haven’t announced anything on this yet,” Lipman said.
Volvo, meanwhile, has exported long-wheelbase versions of its S60 sedan from southwest China since 2015, but a redesign on the nameplate brought production for the U.S. market to South Carolina in June. Still, the Swedish automaker — owned by Chinese automaker Zhejiang Geely Holding Group — has been exporting its S90 flagship sedan from a plant in northern China since late 2016.
Asked what the automaker plans to do about the tariffs, two Volvo spokespeople did not respond to our messages.
The tariffs have implications for future cars, too. Ford announced plans in June to eventually import the next-generation Focus from China rather than building it in North America. Asked if those plans are now in flux, a spokesperson didn’t provide an immediate answer.
Cars Built With Chinese Parts
It wasn’t immediately clear if Friday’s duties would add tariffs to cars with Chinese parts but not necessarily Chinese assembly. Dziczek warned that such action is likely if tariffs come into play for all imported cars.
Which cars with Chinese content might be hit? The American Automobile Labeling Act gives some answers. The decades-old legislation requires automakers to report major sources of foreign content within the equipment of each light-duty car sold stateside. According to data for the 2018 model year published by the National Highway Traffic Safety Administration, Chinese parts are responsible for 17 percent of the Buick Encore and 86 percent of the Envision, plus 31 percent of the content in the Cadillac CT6 and large portions of the Volvo S90 and outgoing S60. Isolated components — from certain engines for the Toyota RAV4 to certain transmission for the Ford Focus — are also from China, per AALA data.
Asked about tariff implications on Chinese automotive content, a representative for the U.S. Customs and Border Protection did not respond.
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