Trump administration fees could hurt the auto and truck industry more than the aid, auto industry veteran Jim Press told CNBC.
Closing Bell " on Friday. "It's not a negotiation tactic." And it causes great uncertainty in investment decisions, production decisions, product design. It is a very difficult situation for car companies. "
US tariffs on $ 34 billion in Chinese goods came into force at 12:01 a.m. EST on Friday.China immediately implemented retaliatory tariffs on its own. he called it the "greatest trade war in economic history."
Chinese tariffs will affect various US sectors, including agricultural products and automobiles, and now vehicles built in the US and sold abroad are Subject to tariffs of up to 40 percent, vehicles manufactured in China and sold in the US, however, pay only a 25 percent tariff, and China imports less cars to the US than the US. Inverse.
The United States exported 267,000 cars to China last year and has a trade surplus of $ 6.4 billion in the automotive sector with China.
"The reality of our cars going to China, We do not manufacture the types of vehicles that Chinese people would use on their roads with their fuel economy, "said Press, who is now president of RML Automotive.
The move left many wondering how automakers in the United States will face higher prices. Mercedes-Benz, which builds SUVs in Alabama, has not yet said how it will address the problem. However, BMW said the rates would affect the retail prices of the models shipped from South Carolina to China. Tesla also said in a note to consumers in China that they should expect higher prices.
Press, who spent more than four decades in the auto industry, including holdings in Toyota, Ford Motor Company, General Motors and Chevrolet, as well as serving as co-president and vice president of Chrysler, said nothing good comes out of trade wars.
"The results are usually bad," he said. "In this case, it really does not deserve it based on the current situation in the US auto industry, but maybe it's a political effort to try to put pressure on China, I do not see how that will help American consumers." 19659010].