Coverage: Washington denies carmakers China tariff waivers
The U.S. administration has denied Tesla, GM, and Uber a waiver from the 25% tariffs imposed on a wide range of Chinese-made products.
CNBC’s Jesse Pound reported the news focusing on the EV maker:
The U.S. trade representative’s office has reportedly denied electric car maker Tesla’s requests to waive tariffs on the car company’s China-made center screen and car computer on its Model 3.
The office previously denied a waiver request for Tesla’s autopilot “brain” in May. The automaker is seeking exemptions from the 25% tariffs imposed on certain imports from China by the Trump administration.
Tesla’s shares dropped about 1% immediately following the report before rebounding to trade roughly 1.5% higher for the day.
Tesla has stated that it expects to produce and deliver between 90,000 and 100,000 vehicles this quarter. The automaker has been building a factory in China for its Model 3.
David Shepardson from Reuters reported Washington had also denied similar requests by GM and Uber:
The Trump administration is expanding efforts to block the use of Chinese technology in advanced vehicles, denying additional requests by Tesla Inc for tariff relief on key components of its electric vehicles, and rejecting ride-hailing company Uber’s petition to waive tariffs on electric scooters and at least 50 separate requests by General Motors Co.
The more than 50 requests by GM rejected by USTR were for exemptions from Chinese-made parts used in vehicles including electronic controllers used for high voltage battery controls in hybrid and electric vehicles. It also rejected GM requests for high frequency antennas, push-button ignition switches, battery cables, electric motor parts and brake parts.GM declined to comment. In filings it said that some parts were not available outside China or that it would be cost prohibitive to shift production elsewhere.
The USTR denied Uber Technologies Inc’s request on May 29 for an exemption from the 25% tariff for its Chinese-made electric bikes that customers rent through its app. Uber declined to comment.
TechCrunch’s Kirsten Korosec delved into the motivation behind the decision:
In a May 29 letter, the USTR denied Tesla’s requests, stating that the Model 3 car computer and center screen are products that are “strategically important” or “related to Made in China 2025 or other Chinese industrial programs.”
Made in China 2025 is China’s strategic plan to move away from manufacturing to produce higher-value goods, particularly in the areas of AI, electric vehicles and robotics. The White House has remarked that Made in China is a direct threat to U.S. domestic technology and automotive companies.