Beijing Officials Warn that Tariffs on China will mean tariffs on US imports
WASHINGTON, DC — Chinese officials has warned USA of a trade war if Trump's Presidency imposes new tariffs on Chinese imports.
In an interview with Financial Times, US Commerce Secretary Penny Pritzker stated that during a meeting after the US November election, Chinese officials informed US counterparts that they would have no choice but to respond to trade measures taken by the President-elect's administration.
“The Chinese leadership said to me ‘If you guys put an import duty on us we are going to do it on you’,” stated Ms Pritzker. “And then they said: ‘That will be bad for both of us’.” In addition, she further stated that the next administration needed to decide “the fine line between being tough and a trade war”, warning that such a confrontation would have an “enormous consequence” for USA. The move highlights the concern in China over the risk to relations presented by Mr Trump, who has also offended Beijing by breaking with traditional US policy on Taiwan.
Japanese officials and top executives also pushed back against President-elect Donald Trump, warning on Friday of fallout for US-Japanese trade and investment if he followed through on his call to impose a border tax to stop automakers from building a new plant in Mexico.
Mr. Donald Trump and his advisers argue that since China’s 2001 entry into the World Trade Organization it has been competing unfairly and has caused the loss of millions of American jobs, particularly in manufacturing.
“I think the competition is very stiff and I don’t think we should take for granted the fact that the United States has been the number one place in the world to invest for the past four years,” said Ms Pritzker. “Many of the companies that invest here do so because of the ability to make here and sell elsewhere. BMW is a great example. They export more cars from the United States than they do from Germany. We want that. It’s great. It’s good for America. Those are good American jobs.”
Ford cancels new $1.6B MX plant; plans to invest $700M in Flat Rock, Michigan insteadDETROIT, MICHIGAN - (January 3, 2017) - Today, Tuesday, President-elect Donald Trump threatened to impose a "big border tax" on General Motors Co. (GM) for manufacturing some of its Chevrolet Cruze cars in Mexico, which the US Automotive OEM defended as part of a strategy to serve global customers, not sell them in the US.
“General Motors is sending Mexican made model of Chevy Cruze to U.S. car dealers-tax free across border. Make in U.S.A. or pay big border tax!” Trump posted on Twitter.
GM said it manufacturers all of its Chevrolet Cruze sedan in the US and that those sold in the United States are manufactured in its Lordstown, Ohio plant. “GM builds the Chevrolet Cruze hatchback for global markets in Mexico, with a small number sold in the U.S.” it said in a statement posted on its website without giving numbers. Shares of GM rose 1% to $35.19 after falling about 1% following President-elect’s tweet before the market opened.
Later Tuesday morning, Ford Motor Co. said it will cancel a planned $1.6-billion factory in Mexico and will invest $700-million at a Michigan factory as it expands its electric vehicle and hybrid offerings.
The U.S. automotive giant said it will add 700 direct new jobs in Flat Rock, Michigan to produce high-tech electrified and autonomous vehicles, plus the Ford Mustang and Lincoln Continental.
Ford had originally planned to build its Ford Focus at a plant in San Luis Potosi, Mexico. The company said it will continue to build its Focus at an existing plant in Hermosillo, Mexico, to improve company profitability.
Last month, Trump announced the formation of a council to advise him on job creation, a group comprised of leaders from a variety of major U.S. corporations including GM Chief Executive Officer Mary Barra.
GM said in 2015 it would build its next-generation Chevrolet Cruze compact in Mexico as automotive OEMs look to expand in Mexico to take advantage of low labor costs and free trade agreements. GM said in 2015 it would invest $350-million to produce the Cruze at its plant in Coahuila, MX as part of the $5-billion investment in its Mexican plants announced in 2014.
GM said earlier this year it would import some Cruze cars from Mexico.
According to Automotive News, GM began producing the Cruze in Mexico last year, making 52,631 cars there. In comparison, it built 319,536 of them in the US. Previous versions of the Cruze sold in Mexico were made in a GM South Korea plant, it reported.
The shift is part of a larger trend among Detroit’s "Big 3" auto OEMs to produce more small cars for the North American market in Mexico in an effort to lower labor costs, while using higher-paid U.S. workers to build more profitable trucks, sport utility vehicles and luxury cars.
In November, GM said it planned in early 2017 to lay off 2,000 employees at two U.S. auto plants, including the one in Lordstown. U.S. small car sales have been hurt by lagging consumer demand and low gas prices. GM’s U.S. Cruze sales are down 18 per cent through November.
Representatives for the United Auto Workers (UAW) union could not be reached immediately for a response to Trump’s tweet.
Trump’s comments are the latest in a string of Tweets he has posted targeting companies over jobs, imports and costs before he takes office on January 20, including United Technologies Corp’s Carrier unit and U.S. defense companies.
President-elect Donald Trump campaigned with promises to protect American workers and called out several companies by name, including GM rival Ford Motor Co.