Are we getting into a trade war with China?
President Donald Trump is highly opposed to foreign automakers selling cars in the United States, and American automakers building their cars in other countries. Trump's policies on trade tariffs have caused tensions with foreign countries such as Mexico, and now China. According to a report by Reuters, Ford and several German manufacturers are experiencing holdups at Chinese ports due to trade tensions with China. Three sources close to the matter say US goods are facing increased scrutiny in China thanks to a trade standoff.
The sources claim that several Ford and Lincoln models have been facing unusual delays, with Chinese officials asking for extra checks. Some US-built models from German automakers, mostly SUVs, were also being held. According to a China-based executive from Ford, the company was asked to do extra checks on emission components. The executive asked to remain anonymous due to the sensitivity of the issue. A second source says BMW and Mercedes have also experienced delays, though a BMW spokesperson said “US-made BMW cars have not been delayed at the ports as of last week and before.”
A spokesperson from Mercedes is “monitoring the situation closely,” but would not speculate further. The China-based executive added that “Customs pretends there are technical non-conformities of some nature that won’t allow them to clear these US-made cars through customs, but the US-China trade frictions must be the background to this. Although no one will officially admit it.” So far, Japanese and German automakers have not experienced these issues with cars built outside of the US. It is unclear whether GM was also effected, because the company only plans to import around 150 vehicles from North America to China.
President Trump has threatened up to $150 billion in tariffs on Chinese goods, which could be sparking retaliation from China. For now, the delays haven't caused any major sales disruptions because automakers tend to keep 60 days worth on inventory. If the delays get any longer, it could start having an effect on sales.