Here's why China's tariffs won't hurt GM
- General Motors won't be directly impacted by China's tariffs.
- That's because GM makes most of its China sales in the country, rather than by exporting cars from the US.
- The real threat to GM is if the Chinese governments turns its media against American brands.
General Motors won't be directly affected by China's newly announced tariffs, an automotive economist told Business Insider.
Back in March, President Donald Trump slapped tariffs on imported aluminum and steel. And on Tuesday, Trump announced he wants to place additionally tariffs on Chinese products. In response, China said it would place retaliatory tariffs of 25% on $50 billion of American goods, including automobiles.
"I don't see them as being susceptible to the tariffs," Charlie Chesbrough, senior economist at Cox Automotive said of General Motors. "There will be no impact directly because they're not doing volumes like Tesla or Ford."
In the first 11 months of last year, General Motors delivered a record 3.55 million vehicles through joint ventures in China.
And while GM sells 70% more cars in China than in the US, most of those sales come through cars made in China, not exported from the US. Therefore, the tariffs won't have a big impact on the company Chesbrough said.
The real threat to General Motors, according to Chesbrough, is one that could arise from political motives, rather than hard economic interests.
"Their vulnerability comes with public perception, and whether American made products, even if not made in America, are perceived differently in China," he said. "If they wanted to turn the media against American companies, they could."
The company published a statement Wednesday, saying "We support a positive trade relationship between the U.S. and China, and urge both countries to continue to engage in constructive dialogue and pursue sustainable trade policies."
General Motors is down 9% on the year.
