· European auto industry responds to Trump tariffs and threatens GAC Group's IPO or changes in the US

Just after Tesla CEO Musk tweeted to US President Trump and asked for "fair trade treatment," Trump officially signed the authorization statement on March 8 (local time in the US), 15 days later. Tariffs of 25% and 10% are imposed on steel and aluminum imported from the United States.

A wave of waves has risen again. After the steel and aluminum tariffs, Trump's one tweet once again caused strong dissatisfaction in the European automotive industry. The Twitter said: "If the EU wants to further increase their existing huge tariffs and trade barriers against US companies, we will impose tariffs on their cars because the previous tax exemption policy has already made us (US) cars (and more) products are hard to sell. This is a huge trade imbalance."

In fact, the imposition of tariffs on steel and aluminum products means that raw material prices in the automotive industry will rise. Adding car tariffs will further push up the price of the car. The "Securities Daily" reporter learned that the United States currently imposes a 2.5% tariff on foreign-made cars and a 25% tariff on trucks and commercial vehicles. The EU imposes a 10% tariff on US cars.

It is worth mentioning that, influenced by the new US tariffs, Zeng Qinghong, chairman of the Guangzhou Automobile Group, said recently that GAC’s IPO to the US has changed. “Guangzhou Automobile is accounting for the comprehensive cost of entering the United States. In 2019, GAC’s plan to enter the US market needs to be reassessed.”

European roar Trump tariff threat

Executives warned that "there will be no winners"

In fact, after announcing a tariff on imported steel and aluminum products, Trump has been emphasizing that tariffs will be imposed on European cars. He said that the EU countries have joined forces to squeeze the US in trade.

The threat of Trump’s imposition of tariffs on imported cars was released shortly, and was immediately refuted by the EU Trade Commissioner. The above-mentioned members vowed to "brave to face the bully of the earth" and said that the imposition of tariffs will expand the opposition of the transatlantic region in trade protectionism, and it is likely to accelerate the formation of a comprehensive trade war.

Volvo CEO Hakan Samuelson said: "Everyone will be a loser, which also includes Volvo, because our entire system is based on free trade. And, because of the rise in commodity prices, including cars, (We) will lose a lot of consumers."

Didier Leroy, chairman of Toyota Motor Europe, warned that “taxes will increase commodity prices, and this will be paid for by consumers. Then there will be potential reactions in China, Europe, and the rest of the world, here. There is no winner."

Bernd Mattsett, former head of Ford Motor Germany and current head of the German automotive industry lobby group VDA, points out that his car group produces 800,000 cars in the US, creating suppliers, including suppliers. Nearly 40,000 jobs. He said, "We exported 430,000 vehicles, which is almost the same amount we imported from this country. Import and export are almost flat."

Some insiders predict that a 25% tariff will increase the price of new American cars by 0.5%-0.8%. It is estimated that by the end of 2019, the number of unemployed people caused by the decline in car sales may reach tens of thousands.

Multiple investments are stranded

GAC went to the US IPO or changed

In fact, the new tariff policy has deeply stirred the hearts of global car companies. Although the New Deal tax rate is not as high as expected, various car companies have to develop contingency plans for a global trade war and re-examine existing plans and projects.

Tang Weishi, CEO of PSA Group, said recently that his plan to return to the US in 10 years is at risk. “Tarries will have an impact on how we enter the market because we have a very phased and gradual approach,” he said. “With very limited volume, in the early days, we will supply cars from outside the United States. If this happens, we will have to reevaluate our strategy."

Domestically, Zeng Qinghong, chairman of Guangzhou Automobile Group, also said that GAC is assessing the possibility of entering the US market in 2019. "Guangzhou Automobile is accounting for the comprehensive cost of entering the United States. If it is acceptable, it will continue to do so. If it is unacceptable, it will not be done."

According to the "Securities Daily" reporter, the reason why GAC considered to enter the US market was because the US market was open and the law was sound and flexible, thus further testing the products. "In the context of globalization, we are eager to go out. But the new tariff policy will definitely have an impact on Chinese auto companies."

Zeng Qinghong believes that in the entire rolling development model, whether the operation is smooth, look at the US tariff policy, and secondly look at the cost. There have been major changes in tariffs today. In this case, GAC must reassess the possibility of going to the US.

When talking about the specific way of entering the army, Zeng Qinghong revealed that GAC will take the CBU (automobile export) to SKD (export powertrain and other bulk parts) to CKD (export full bulk parts) and even local factories. In addition, Zeng Qinghong also stressed that GAC is currently negotiating with Fiat-Chrysler and may use their resources and services in sales.

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