Latest news with #QianKang
The Star
16-05-2025
- Automotive
- The Star
Trump's tariff chaos push Chinese car-parts makers to recalibrate global expansion plans
Lower tariffs on Chinese goods are likely to keep auto-parts exports relatively attractive for American buyers, prompting mainland-based producers to reassess their plans to build production facilities in the US. The US agreed to lower its combined 145 per cent tariffs on most Chinese imports to 30 per cent for 90 days after talks in Geneva on Monday, cooling a stand-off between the world's two biggest economies since US President Donald Trump rolled out his so-called reciprocal tariffs on the nation's trading partners. Officials with five vendors said they embraced the truce since their goods were still demanded by their American clients. China shipped almost 100 billion yuan (US$13.9 billion) worth of auto parts to the US – from electric vehicle (EV) batteries to lidar sensors and drive control systems – in 2024, according to customs data. Do you have questions about the biggest topics and trends from around the world? Get the answers with SCMP Knowledge, our new platform of curated content with explainers, FAQs, analyses and infographics brought to you by our award-winning team. 'We are confident that US customers will be willing to buy our products, even if they still have to pay the extra [lower] tariffs,' said Qian Kang, who owns a factory making printed circuit boards in Zhejiang province in eastern China. 'But neither Chinese vendors nor American customers are able to strike deals, because the outlook is uncertain. You have to be aware that tariffs may jump again 90 days later.' Chinese-made EV batteries are now subject to 58.4 per cent US tariffs – which comprises the 30 per cent extra levy and the existing duties, down from 173.4 per cent before the Geneva deal. Not all Chinese car-parts producers were subject to the 145 per cent additional duty the US imposed last month. On average, they faced an import duty of around 70 per cent, according to the International Intelligent Vehicle Engineering Association. 'All those companies are closely monitoring the tariff war and the adjustments,' said David Zhang, general secretary of the Shanghai-based association. 'But there is no way that any of them can figure out the best way to sustain their business given the uncertainties.' Several automotive supply-chain vendors are still bemused by the volatile tariffs that are complicating their go-global strategies. Studies on production and logistics costs, as well as pricing strategies, were not keeping up with the dynamic trade conditions, they said, making risk management a top priority to navigate the tariff spat. At Auto Shanghai, the world's largest marquee event that ended on May 2, several car-parts producers said they had plans or were already in talks to set up factories in the US as a way of sidestepping Trump's punitive tariffs. Autolink, a smart cockpit supplier backed by Chinese EV maker Nio, has been planning to set up a production base in Detroit since the beginning of this year, a manager told the Post. Fuyao Glass, which makes auto glass, announced in March that it would invest US$400 million to expand its Illinois factory to add to its Ohio operations. Another state-backed manufacturer of electrical connectors and optical devices for EVs, based in central China's Henan province, was also considering building US production facilities, in addition to its existing factories in Vietnam and Germany, according to a manager who requested anonymity because he was not authorised to talk to the media. 'We see greater sensitivity to tariffs among China's car-parts makers,' S&P Global analysts including Claire Yuan wrote in a report last week. 'The fluid tariff situation also makes planning difficult, particularly with regard to offshore investment.' The industry officials with the supply-chain vendors said most of their US customers would opt for their Chinese-made batteries, tyres, optical devices and wheels should the 'reciprocal' tariff stay unchanged beyond the 90-day cooling period. 'My suggestion [to Chinese car-parts makers] is not to make any definitive plans due to the ongoing uncertainty,' said Yale Zhang, managing director of Shanghai-based consultancy Automotive Foresight. 'If you already have branches in Mexico and Thailand, or a European operation supplying the local markets, your global strategy is largely already in place.' More from South China Morning Post: For the latest news from the South China Morning Post download our mobile app. Copyright 2025.
South China Morning Post
13-05-2025
- Automotive
- South China Morning Post
Tariff flux clouds Chinese car-parts makers' overseas expansion plans
Lower tariffs on Chinese goods are likely to keep auto-parts exports relatively attractive for American buyers, prompting mainland-based producers to reassess their plans to build production facilities in the US. Advertisement The US agreed to lower its combined 145 per cent tariffs on most Chinese imports to 30 per cent for 90 days after talks in Geneva on Monday, cooling a stand-off between the world's two biggest economies since US President Donald Trump rolled out his so-called reciprocal tariffs on the nation's trading partners. Officials with five vendors said they embraced the truce since their goods were still demanded by their American clients. China shipped almost 100 billion yuan (US$13.9 billion) worth of auto parts to the US – from electric vehicle (EV) batteries to lidar sensors and drive control systems – in 2024, according to customs data. 'We are confident that US customers will be willing to buy our products, even if they still have to pay the extra [lower] tariffs,' said Qian Kang, who owns a factory making printed circuit boards in Zhejiang province in eastern China. 'But neither Chinese vendors nor American customers are able to strike deals, because the outlook is uncertain. You have to be aware that tariffs may jump again 90 days later.' 03:53 China, US slash most tariffs on each other after first round of trade talks China, US slash most tariffs on each other after first round of trade talks Chinese-made EV batteries are now subject to 58.4 per cent US tariffs – which comprises the 30 per cent extra levy and the existing duties, down from 173.4 per cent before the Geneva deal. Advertisement Not all Chinese car-parts producers were subject to the 145 per cent additional duty the US imposed last month. On average, they faced an import duty of around 70 per cent, according to the International Intelligent Vehicle Engineering Association.
