China’s Taxes on Imported Cars Feed Trade Tensions With U. S. -
By KEITH BRADSHERMARCH 20, 2017
BEIJING — A Jeep Wrangler can cost $30,000 more in China than in the United States —
and the reasons illustrate a growing point of tension between the two countries.
American former officials and current advisers to President Trump say
that concern about the widening United States deficit in automotive trade has become a pressing issue ahead of the president’s meeting in Florida next month with his Chinese counterpart, Xi Jinping.
There is only a small chance that Chinese automakers would set up assembly plants in the
United States, the way Japanese automakers did in the 1980s to allay trade tensions.
Hinting at potentially tough talks to come, Lawrence H. Summers, a former Treasury secretary, raised the issue of auto trade in the first question to Li Keqiang,
China’s premier, at a closed-door meeting on Monday, participants in the meeting said on the condition of anonymity because the discussions were private.
Mr. Li did not answer the question directly, the people said, instead responding
that every country faced trade issues, and that China had its own trade deficits with a few countries, like Australia, from which it imports a lot of raw material.
But in China, the same vehicle would set a buyer back by a hefty $71,000, mostly because of taxes
that Beijing charges on every car, minivan and sport utility vehicle that is made in another country and brought to China’s shores.
Partly because of China’s taxes, less than 5 percent of cars in the country are imported, compared with one-quarter in the United States.
