On April 10, Xi Jinping announced at the Boao Forum for Asia a series of new measures to expand China's opening up, including lowering import tariffs on cars.
Xi Jinping said: 'China does not aim at pursuing a trade surplus, and sincerely hopes to increase imports and promote current account balance. This year, we will reduce vehicle import tariffs considerably, reduce import tariffs on some other products, and strive to increase people's needs. Concentrated characteristics and advantages of product import, accelerating the process of acceding to the World Trade Organization's "Government Procurement Agreement." We hope that developed countries will artificially restrict the trading of high-tech products and artificially limit the export of high-tech products to China.
When the Sino-US trade frictions intensified, the introduction of this measure has attracted more attention.
In fact, as early as March of this year, Musk complained on Twitter that the 'unfairness' of the automobile trade between the two countries is already obvious. The U.S. car will have to pay a 25% tariff when entering China. The Chinese car will only enter the United States. Pay 2.5%. At the same time, if American car companies want to operate in China, they must establish cooperative relations with local car manufacturers.
The intention of the Chinese government to establish this policy is also very clear, that is, to increase the competitiveness of the Chinese auto industry globally while introducing foreign capital.
However, Musk believes that this is a great burden for American car manufacturers, like 'Leads tied to the legs in the Olympic Games.'
Not long ago, Trump complained on Twitter that a Chinese car would only need to pay 2.5% to enter the United States, but a U.S. car entering the Chinese market would have to pay an import duty of 25%. He said: Is it fair? No, it sounds stupid, and it has been practiced for so many years!' And his description of this paragraph seems to have also quoted Tesla CEO Musk.
The status quo is that American automakers are squeezing their heads into the Chinese market. China is currently the world's largest auto market, and sales in China are critical to management.
Once the Sino-U.S. trade war is fully launched, the suffering nature will inevitably be driven by US auto dealers. Despite the increase of tariffs, many imported automakers, including GM and Ford, are among them. However, one company faces risks that are far away. This is the reason why Tesla has not built a factory in China. All goods in China are exported.
It should be noted that only the cost of transportation and various taxes, the unit price of these imported vehicles is already higher than their price in the United States. After tariffs are imposed, China's Tesla consumers will also pay high tariffs on purchased vehicles. Therefore, this move to lower auto import tariffs is indeed a good news for companies like Tesla.