The cold war between America and China has intensified further with the announcement of additional duties on cars imported from the United States in China. The imposition of duties on large-engined American cars will affect global auto giants like General Motors, Chrysler and BMW. Earlier, the commerce ministry of China alleged the American car industry of 'dumping and subsidising' their products, causing substantial damage to country's domestic car industry.
The amendment will have maximum impact on General Motors as its sports utility vehicles (SUVs) and cars with 2.5-litre engine capacity to be levied with 22 per cent more tariff. Meanwhile, Chrysler cars will be levied 15 per cent extra duty, while BMW will witness a hike of 2 per cent.
The import duty structure in China escalates cost of U.S. imports by 25 per cent. This may lead to further price hike by the affected car makers, making it more expensive for Chinese buyers. Soon the shares of General Motors fell by 3 per cent, while BMW's shares experienced depreciation of 5 per cent.
Reacting to the tariff imposition, Carl Levin, Senator for Michigan, referred it as an 'unjustified' move that has violated international trade laws. He added that China is continuously engaged in unlawful trade practices that are unauthorised as per world trade guidelines.
Juergen Pieper of Bankhaus Metzler underlined China's political intervention in its markets. General Motors spokesman said that the tariff will have an immediate impact, as China is one of the most productive markets for the auto maker.
The tussle between China and U.S. seems to be never-ending, with both countries taking legal actions and using tariffs to fuel it even more over the years.
