Executive Briefings

China's Taxes on Imported Cars Feed Trade Tensions With U.S.

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.

Manufactured in Toledo, Ohio, the Wrangler is a descendant of the jeeps that were used by American forces in World War II. Equipped with a 3.6-liter engine and a five-speed automatic transmission, the Rubicon edition of the Wrangler has a suggested retail price of $40,530 in the United States.

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.

Those taxes on imported cars have become a growing area of friction between the United States and China. 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.

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Manufactured in Toledo, Ohio, the Wrangler is a descendant of the jeeps that were used by American forces in World War II. Equipped with a 3.6-liter engine and a five-speed automatic transmission, the Rubicon edition of the Wrangler has a suggested retail price of $40,530 in the United States.

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.

Those taxes on imported cars have become a growing area of friction between the United States and China. 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.

Read Full Article