At the China Gateway, the tariff drops an ointment for severely hit US car dealers by Reuters

© Reuters. Imported vehicles are seen in car dealership in Tianjin-bound zone

By Yilei Sun and Adam Jourdan

TIANJIN, China / SHANGHAI (Reuters) – In the Chinese port city of Tianjin, gray market traders of American-made cars, poorly touched by a trade war and punitive tit-for-tat tariffs, distortion to take advantage of an opportunity they fear, can prove only temporary.

In a car "supermarket" near the city's busy port, importers told Reuters they were rushing to get "Made in America" ​​cars through customs and revving orders after Beijing temporarily cut tariffs on US cars from 1[ads1]. January.

Activity in the harbor – after a freeze since China beat US auto imports with a 40 percent increase in July – illustrates how ebbs and streams in the long-standing trade war between Washington and Beijing affect global businesses.

"Our business was hit hard in 2018. Sales fell abruptly and we were forced to keep cars in tied zones waiting for take riffs to be cut," said Kevin Li, a port dealer who brings the company into the United States – made luxury sports utility vehicles (SUVs).

"Now we are discussing with US dealers to start importing more cars again."

The higher tariffs have hit premium car manufacturers who import a large part of the vehicles they sell in China, including Tesla Inc (O :), Ford Motor Cos (N 🙂 Lincoln brand and Germany's BMW (DE 🙂 and [19659010] Daimler AG (DE :), who both have production in the US.

Chinese and US trade dealers have been locked in negotiations in Beijing this week in an attempt to end the trading tensions that have shaken markets. They talked wrapped on Wednesday, hoping to grow that a deal could be hit.

(US car exports to China breakdown during trade war png: https: // tmsnrtrsrs / 2SDxiVD)

The two country leaders hit a 90-day trading weapon last month after talks on the sidelines of the G20 meeting in Argentina who saw China's steep tax on cars trimmed back in three months to the end of March.

In the first ten months of 2018, US passenger transport exports to China, with the exception of public transport, were just under $ 6 billion, down from over $ 8.5 billion in the same period the year before.

Since the middle of last year, when China increased tariffs, US car exports to China have doubled between 35-55 percent each month compared to the previous year, far more steep than in the first half.

Shortly after the Chinese announcement, Tesla, Mercedes-Benz's parents deleted Daimler and BMW their prices for imported US-made cars to make about are less expensive.

An official of China's largest car dealership said he expected formal imports of car manufacturers to revive the next few months, given the lower tariffs. Reuters could not immediately confirm whether numbers had already begun to climb.


However, car dealers in the harbor said that customers had started returning late last month.

"We see significantly more customers coming since the announcement of tariff cuts on US cars," said Peter Liu, a dealer in the port, who imports cars from the US, including Mercedes-Benz and Land Rover SUVs.

Liu firm offers a 10-15 percent discount to customers to bring in much needed cash flow after a tough six months with his cars fixed, and paid fees in the gates of parking lots to avoid the steep charges.

"The duty rate on US cars has pushed us to clear our cars parked in tied zone through customs. We have already submitted documents to clear two Benz GLS 450s," Liu said.

Rival dealer Kevin Li said that he should bring 20 Mercedes-Benz SUVs through the customs, and availed himself of the tariff "window" to take in cars even without fixed orders. [19659004] It was a gamble, with the general demand still w eak, he acknowledged. 19659004] Data show that China's domestic car market was probably contracted last time since 1990, and analysts say it is unlikely to turn around soon.

"There is a danger that car sales will not be so good in the first quarter, but we must use the tariff, "he said." We pay for the tariff before you receive orders. "


The gray market in Tianjin is just part of China's car market, the world's largest, but it provides an important insight into automatically in mport trading. While automakers prefer to import their own vehicles, Beijing has encouraged alternative channels, resulting in strong market growth.

This gray channel channel accounted for about 14 percent of all imported cars in China in 2017, nearly doubling 7.7 percent in 2014, according to data from China's largest car importer, Sinomach Automobile Co., Ltd. (SS :).

Tianjin is the largest port in China for parallel car imports, and includes about 70 percent of its total parallel car imports, according to a trade negotiation report.

Dealers estimate that there are more than 10,000 American cars in the seabed's bound zones.

Without a guarantee, the lower tariff window was not closed again in late March, and the companies rushed to bring cars in, dealers and business insiders said.

Su Hui, senior employee of the China Automobile Dealers Association's parallel car chamber, said it took about two months to complete the process of ordering a US automobile to complete customs clearance in China.

"So there's not much time for importers," he said.

Rudeness can also put pressure on customs in major Chinese ports, including Tianjin, Shanghai and Zhoushan.

Leo Liu, a Shanghai-based dealer at Yuanfang Global, selling 700 US-imported cars a year, told Reuters that his company cleared 100 cars to Shanghai Waigaoqiao since the fare competition.

"But there are so many uncertainties, so we have to hurry," Liu told Reuters.

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