Guangzhou Automobile Group (GAC) is the latest and best-positioned Chinese automaker with plans for sales in the U.S. Days after GAC showed off a sample of its lineup at the Detroit auto show, including a sub-brand that is (fortunately or unfortunately) named Trumpchi, the automaker and its home country’s trade policies faced criticism from U.S. politicians.
Reuters reports that Sen. Chuck Schumer, D-N.Y., argued on the Senate floor last Wednesday that Chinese trade rules as they apply to cars are “manifestly unfair and a typically unfortunate example of China’s rapacious trading policies.”
Schumer’s arguments stem from the fact that Chinese-built automobiles would face a 2.5 percent tariff, while cars exported from the U.S. to China face a 25 percent tariff. This is why many U.S. automakers that sell cars in the Middle Kingdom build them there, including Buick, which has a much larger lineup in China than in the U.S. and now exports one model to the U.S.
The White House has also criticized the high import tariffs U.S. goods face in China and has repeatedly called for higher tariffs on specific goods shipped from China. In a matter of days the administration will decide whether to impose even higher tariffs on imported solar panels, a move calculated to help domestic manufacturers. The administration has repeatedly criticized the current trade regime with China when it comes to a number of goods.
It’s unclear whether GAC and other Chinese automakers with their sights set on the U.S. market will be deterred by the imposition of tariffs; so far no significant action has been taken when it comes to car imports. GAC plans to enter the U.S. market in 2019 with the GAC GS8, a seven-seat premium SUV.
The automaker wants to sell as many as 100,000 vehicles annually in the U.S. during the first two years — a lofty target, especially given the fact it needs a distribution network. The automaker has mentioned that it hopes to work with Fiat Chrysler in the U.S. when it comes to distribution and that it has also reached out to independent dealership groups.
Setting up a dealership network may prove to be the bigger hurdle for GAC than the threat of tariffs — 2019 isn’t far away, and launching an all-new brand in the U.S. is something that Fiat and Alfa Romeo had trouble with not too long ago, even with effective control of Chrysler.