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GAC's U.S. drive runs into Washington opposition
Reuters | 2018/1/19

WASHINGTON -- Guangzhou Automobile Group Co.s plan to sell vehicles in the United States ran afoul of Washington trade politics on Wednesday, as the top Senate Democrat and President Donald Trump separately criticized Chinese trade practices.

GAC said Monday it plans to start selling vehicles in the United States in late 2019, potentially through a partnership with Fiat Chrysler Automobiles NV.

The southern Chinese automaker initially said it had hoped to start selling vehicles in the United States in 2017.

Sen. Chuck Schumer, D-N.Y., cited GAC's plans announced in Detroit on the Senate floor Wednesday and argued that Chinese automotive trade rules are "manifestly unfair, and a typically unfortunate example of Chinas rapacious trading policies."

Chinese-built light vehicles shipped to the United States face just a 2.5 percent tariff, while U.S.-built cars and light trucks sent to China are hit with a 25 percent tariff.

Trump told Reuters in an interview Wednesday that "we have helped to build China because they have taken out so much money in terms of trade deficits with this country."

He said that "when China or another country charges us 50 percent tariffs C more than that in some cases C and we charge them nothing, thats not fair."

GAC had no immediate comment on Schumers remarks. But the company did confirm this week that it plans to change the name of vehicles sold in the United States from its flagship brand, Trumpchi to avoid confusion with Trump. It also plans to eventually sell vehicles in Europe.

While Schumer and Trump have clashed on many issues, the interests of Democrats and the Republican president are more aligned on automotive trade. 

Both want to win votes from auto workers in industrial states such as Michigan or Ohio whose jobs could be threatened should Chinese vehicles come to the United States in high volume. Leaders of the UAW regularly raise concerns about U.S.-China automotive trade.

In 2016, General Motors became the first major automaker to sell a Chinese-made vehicle in the United States, importing its Buick Envision. GM sold 41,000 of the small crossovers last year.

Volvo Car Corp. also been exporting vehicles from China to the United States since 2016. And in June, Ford Motor Co. said it would move some production of its Focus small car to China from Mexico and import the vehicles to the United States by 2019.

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