The United States has apparently denied General Motors’ request that its Chinese-made vehicle be exempt from the 25% U.S. tariff levied on goods from China.
GM made the request targeting an exemption from the tariff for the company’s Buick Envision, a sport utility vehicle (SUV) the carmaker assembles in China.
The U.S. Trade Representative’s office wrote to GM on May 29 indicating that the petition, which has taken almost a year, related to “a product strategically important or related to ‘Made in China 2025′ or other Chinese industrial programs.”
The Buick SUV is a midsize vehicle that the automaker has priced at $35,000, and has the largest volume of sales in China. GM sells nearly 200,000 Buick Envisions in China every year.
Sales for the Buick Envision in the United States fell nearly 27% in 2018, dropping to 30,000 units. The sales declined another 21% by the end of March this year.
The company has acknowledged that its request has been denied but noted that it has paid the tariff since last July. Notably, the company has not raised the SUV’s sticker price to plug the tariff’s impact.
However, that notwithstanding, the car is often used by critics in the United States when disapproving of Chinese-made goods. Some of this criticism has come from United Auto Workers union leaders. Critics point to the company’s move to base its Envision assembly line in China and not the U.S.
But General Motors has argued that assembling the vehicle in the U.S. would not be an option given the low sales volume. The Envision has to compete for the same U.S. market with cars like the Cadillac XT5 and the Jeep Grand Cherokee.
In 2018, just before higher tariffs took effect, GM reportedly shipped to the U.S. Buick Envisions worth a six-month supply volume. The tariff at the time was much lower at 2.5%.
The rejection of the request made by GM also comes less than a month after the U.S. Trade Representative’s Office rejected a similar application from Chinese-owned Volvo Cars for its China-assembled XC60. The SUV is Volvo’s top-selling vehicle in the United States.