Trump's 25 per cent duty on imported goods will hamper import of Chinese-assembled cars to the U.S.

According to a Bloomberg report, Trump administration’s 25 per cent duty on about $50 billion worth of imported goods will hamper growing export of Chinese-assembled cars to the U.S. auto market. A small number of Chinese-made cars make way to the U.S. market, but the number has been on the rise.

Volvo Cars started importing S60 sedans from China in 2015. General Motors Co. also imported Buick Envision SUV and Cadillac CT6 plug-in hybrid in small numbers.  According to Autodata Corp, about 4,367 Envisions were sold in the U.S. last month, less than 1.5 per cent of GM’s total sales, plus only 17 plug-in Cadillac CT6s.

“At this point, the decision would put on hold any plans to import cars,” said Jeff Schuster, senior vice president of forecasting for LMC Automotive, adding that “it’s really ploy to get the Chinese to the table.”

In retaliation China threatened to retaliate with its own 25 per cent levy on around $50 billion of U.S. imports including cars, chemicals, soybeans and aircraft. That could have a strong impact on carmakers like Tesla Inc., which hopes to generate about for 9 per cent of revenue in 2018 by exporting U.S. made vehicles to China.

Tesla is already affected by current 25 per cent import tax that raises the sticker prices of Model S sedans and Model X crossovers. An additional duty by China on top of that would further relegate Tesla into a very selective luxury income market.

If Trump goes ahead with the proposal, he would add a duty for most cars and commercial trucks, as well as auto parts, which will reduce auto import from China.

Though Ford doesn’t import any models from China yet, it had plans to import its Focus compact from China next year. Both Ford and General Motors are looking at a positive trade relationship between China and the U.S. Volvo said it was too early to comment on its potential impact of the taxes.

The tariffs may defer Guangzhou Automobile Group Co.’s plans to enter the U.S. auto market next year. The Chinese automaker has plans to bring the GS8, a seven-passenger sport utility to American shores.

“We need to have a level playing field, but we need to make sure that there are not unintended consequences,” Dingell, a Democrat, said Wednesday at the opening of an autonomous-vehicle test site in Ypsilanti, Michigan.