The Buick Envision is caught in the new tariff wars as its built in China and sold in the U.S.
The tariffs implemented by the Trump administration on China are having a negative impact on several American companies, specifically General Motors. However, the company is looking to find a way around them.
GM’s Buick Envision is built in China and, as such, is subject to hefty levy when entering the country, but the company is in talks with Trump’s trade representatives to get an exemption on the popular midsize sport-utility that accounts for nearly 20% of the brand’s U.S. sales.
GM said in a statement that it filed the request on July 30 with the U.S. Trade Representative. An official notice was posted on Thursday on the regulations.gov website, which is tracking requests for exclusions from the so-called Section 301 tariff on certain imported goods from China, according to Reuters.
Products excluded from the 25% tariff must demonstrate that they generate a positive impact in the United States, in terms of employment, revenue, etc. that could not be accomplished by manufacturing the product in the U.S.
(China to “significantly lower” tariffs on vehicle imports. Click Here for the story.)
In its request for exemption, GM claims that Envision sales in China and the United States would generate funds “to invest in our U.S. manufacturing facilities and to develop the next generation of automotive technology in the United States.”
The Buick Envision is imported to the U.S. from China and the temporary suspension of tariffs was good news for GM; however, Trump and China are at odds again.
Additionally, the company noted the “vast majority” of Envisions, about 200,000 a year, are sold in China with about 41,000 sold in the U.S. Because of the lower U.S. sales volume, “assembly in our home market is not an option” for the Envision.
(Click Here for more about Buick topping J.D. Power’s Customer Satisfaction index.)
However, should it not get the exclusion, GM made moves to offset the impact of the tariffs, including shipping a six-month supply of Envisions at the much lower 2.5% tariff rate prior to the July 6 implementation of the 25% levy.
Additionally, the company lowered prices by as much as $2,500 on the 2019 models, which it shipped before the July 6 deadline. This gives Buick’s 2,000 U.S. dealers plenty of lower-priced Envisions to sell this fall.
(GM set to reveal Chinese EV concept despite trade war threat. Click Here for more.)
That said, GM has announced no plans to stop U.S. sales of the Envision or to relocate production of U.S.-bound models to another plant outside China, a source familiar with the company’s strategy told Reuters on condition of anonymity.