According to foreign media reports, German luxury car maker BMW said on July 6 local time that it will not be able to "completely digest" China's 25% tariff on imported cars from the United States, and will have to increase its sales in the south of the United States. Prices for cars produced at the Spartanburg, Carolina plant. BMW said it was "currently calculating price increases for U.S.-made models exported to China" and would announce it "at a later stage."


BMW has been exporting its highly profitable X4, X5, X6 SUVs and crossovers to China. Last year, BMW's U.S. plants shipped more than 100,000 vehicles to China.


In response to the Trump administration’s move to impose tariffs on about $34 billion worth of Chinese goods, China announced that it will impose 25% tariffs on 545 U.S. goods, including cars imported from the United States, starting July 6. A few days ago, China cut tariffs on all imported cars.


The U.S.-China tariff spat has left automakers with a tough choice: Should they bear the cost of tariffs to reduce profits or risk lower sales by raising car prices? Johan Gott, head of Kearney Management Consulting in the United States, said, “Automakers face The question is whether you can sell cars to consumers at a higher price; if not, where do you make the profit.”


Automakers are already grappling with the impact of U.S. tariffs on imported steel and aluminum, Gott said, and are also facing Trump's threat to impose a 25 percent tariff on auto imports from the European Union. In addition, Trump has threatened to withdraw from the North American Free Trade Agreement. "If you're an automaker and you're dealing with all this, you're probably going to have massive disruption," Gott said.


Ford said on July 5 that it would not raise prices in China for Ford and high-margin Lincoln luxury models for the time being.


German automaker Daimler said last month it lowered its 2018 pretax profit forecast as high tariffs on U.S. car exports to China would hurt sales of Mercedes-Benz SUVs in China. A Daimler spokesman said the company was closely monitoring the tariff situation but declined to comment on its pricing strategy.


On the other hand, GM imports the Buick Envision SUV from China to the U.S., which is currently being hit by tariffs. GM imported a total of 41,000 Buicks into the United States last year. A GM spokesman said there has been no decision yet to raise the price of the Buick Envision for the U.S. market.


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