Tariffs and retaliatory tariffs may bring down China’s light vehicle imports in 2019

As forecasted by Sinomach Automobile Co., China’s largest dealer of imported cars and light trucks, China’s light-vehicle imports are likely to drop by more than 5 per cent in 2019.

This decline is attributed to an economy that is steadily losing steam and China’s continued trade disputes with the United States.  If the situations do not improve, the dealer said at a forum organized in Beijing, the import will plunge next year.

According to Sinomach, in the first three quarters of 2018, China’s light-vehicle imports dropped 4.2 per cent to about 847,000 vehicles in comparison with the same period of 2017. Roughly 622,000 imported vehicles were delivered to customers during the period while the rest were stockpiled at dealerships. This is in stark contrast to the 1.2 million vehicle imports to China in 2017, which registered a 17 per cent growth from a year earlier.

It is to be noted that on July 1, the Chinese government slashed import tariffs on light-vehicles to 15 per cent from 25 per cent. However, on July 6, it raised the tariffs for vehicles imported from the U.S. to 40 per cent. This was to retaliate against fresh punitive tariffs the Trump administration slapped on range of Chinese goods.   The trade war between the two big auto markets in the world will prove detrimental to the global automobile sector that is investing huge in expanding their manufacturing capacities in China.