U.S. denies GM tariff relief request for China-made Buick SUV

 U.S. denies GM tariff relief request for China-made Buick SUV

WASHINGTON (Reuters) - The Trump administration has denied a General Motors Co request for an exemption to a 25 percent U.S. tariff on its Chinese-made Buick Envision sport utility vehicle.

The denial of the nearly year-old petition came in a May 29 letter from the U.S. Trade Representative's office saying the request concerns "a product strategically important or related to 'Made in China 2025' or other Chinese industrial programs."

The midsize SUV, priced starting at about $35,000, has become a target for critics of Chinese-made goods, including leaders of the United Auto Workers union and members in key political swing states such as Michigan and Ohio.

GM said on Tuesday it was aware of the denial and has been paying the tariff since July. GM has not raised the sticker price to account for the tariff.

Buick Envision sales fell in the United States by nearly 27% to 30,000 last year and fell another 21% in the first three months of 2019.

Only a small number of vehicles are built in China and sold in the United States.

Last month, the U.S. Trade Representative's Office also denied a request by Chinese-owned Volvo Cars for tariff exemptions for mid-size SUVs assembled in China after the automaker sought an exemption for the XC60, its top selling U.S. vehicle.

GM, the largest U.S. automaker, argued in its request 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.”

GM said last year the “vast majority” of Envisions, about 200,000 a year, are sold in China.

Because of the lower U.S. sales volume, "assembly in our home market is not an option" for the Envision, which competes with such mid-size crossover vehicles as the Jeep Grand Cherokee and the Cadillac XT5.

Ahead of the July 2018 start for higher import tariffs, GM shipped in a six-month supply of Envisions at the much lower 2.5 percent tariff rate, Reuters reported in August 2018.

(Reporting by David Shepardson; Editing by Chris Reese)

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Updated Date: Jun 05, 2019 05:06:50 IST