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United States Rejects Tesla Bid Exemption Tariff for Autopilot & # 39; by Reuters



© Reuters. A 2018 Tesla Model 3 electric vehicle is shown in Cardiff, California,

By David Shepardson and David Lawder

WASHINGTON (Reuters) – US Trade Officers Declined Tesla (NASDAQ 🙂 Inc's Relief Relief from President Donald Trump's 25 Percent of tariffs on the Chinese-made Autopilot "brain" on its model 3 and other electric vehicles, one of more than 1

,000 product names related to China's industrial development plans.

According to documents filed by the US Trade Representative's Office (USTR) and reviewed by Reuters, exclusion requests from Tesla and other Chinese-produced aircraft parts to biotechnological instruments were denied because they were considered "strategically important" for "Made in China 2025 "program.

Tesla refused to comment.

The company has separate pending exclusion requests for duties on the Chinese-made model 3 center screen and for the model 3 image computer before the USTR.

Tesla said in a security filing on Monday: "Our costs for producing our cars in the US have also been affected by import taxes on some components sourced from China."

The denials illustrate a systematic approach of the Trump administration to counter China's efforts to develop high-tech industries that Washington claims to benefit from theft and forced transfer of US intellectual property.

Made in China 2025, a program to boost China's skill in 10 strategic industries dominated by the United States, is at the heart of trade negotiations and US demands for debilitating changes in China's policies.

These industries include new energy and autonomous vehicles, aviation, semiconductors, biopharmaceutical products, robotics and art all intelligence.

ECONOMIC HARM

Tesla first made his request to exclude his 3.0 Autopilot Electronic Controller in July 2018, as it called "the brain of the vehicle" when Palo Alto, California-based automaker warned that "increased rates on this part cause financial damage to Tesla, through increase in cost and impact on profitability. "

In a March 15 letter, USTR's Secretary General Stephen Vaughn said the agency denied Tesla's request because it" relates to a product strategically important or related to "Made in China 2025 or other Chinese industrial programs. "USTR issued its own letter, and also denied a request for the previous 2.5 version of Autopilot ECU.

It was not clear when the letter was posted on a US government website. for industrial robots imported by Kawasaki Robotics USA and composite panels made by Hexcel Corp in China for use in various Boeing (NYSE: ) Co fly.

Some minor high-tech products quoted in the 2025 rebates included a wire harness for a backdoor imported by Lear Corp's Chinese joint venture, Kyungshin-Lear Sales and Engineering LLC.

"The composition of the material of the product consists of insulated wire, connectors, terminals, tapes and wires," said Kyungshin-Lear in his request.

USTR has received China exclusion requests for nearly 13,000 products and denied 5.311. Of the denial contained 1.166, or more than one-fifth, the same language as the Tesla request, referring to links to Made in China 2025.

NO US SOURCES

Tesla told the USTR that it could not find a manufacturer in the United States and adds that "choosing another provider would have delayed (Model 3) the 18-month program of clean room setup, line validation, and staff training."

Tesla says it reflects the Autopilot ECU with the latest Firmware creation in California when shipped from China by supplier Quanta Shanghai.

"For a consumer-critical product, and critical to the essence of Tesla, we turned to industry experts who could achieve this quality and complexity as well as deadlines that were not possible outside of China," Tesla wrote. "When it comes to identifying a supplier, we cannot risk our customers' lives because of a supplier's shortage."

Autopilot ECU, also used in models S and X, contains two printed circuit boards which Tesla is called "the brain responsible for Tesla's Autopilot functionality" and the most important safety system for the vehicle.

Tesla has a separate pending exclusion request submitted in December for tasks on the Chinese made Model 3 center screen.

Other exclusion requests also cited the lack of US sources. Kawasaki said there are no industrial robots manufactured in the United States, and it only produces robots in China and Japan.

In a previously unannounced request, Tesla also asked the USTR to waive tariffs on 17-inch (43 cm) cockpit touchscreen control panel showing navigation, media, audio, climate control, energy display and all cabin controls

Other car manufacturers have searched similar exceptions but have not yet received a reply.

General Motors Co (NYSE 🙂 at the end of July sought an exception to a 25 percent US tariff on its Chinese-produced Buick Envision sports utility vehicle. Envision accounted for almost 15 percent of US Buick sales last year.

GM has also sought exclusion for dozens of parts, including push button ignition switches and transfer bearings.

Nissan Motor Co. and Fiat Chrysler Automobiles NV have also filed exclusion requests for parts, while Uber Technologies (NYSE 🙂 Inc requested the exclusion of electric bicycles hired through the Uber app.

Although the US and China now reach a trade agreement in the In the coming weeks to resolve their disputes, companies cannot see tariff dependence for months or possibly years. People who are familiar with the talks say some tariffs, especially those aimed at the Made in China industry 2025, could remain in place as part of an enforcement mechanism.

Vice President Mike Pence said on Friday that the way tariffs were removed would be part of the mechanism to ensure that China fulfills its obligations in any deal.


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