Tariffs continue to impact companies
BMW announced over the weekend that it is raising the price of its SUVs in China because of the steep cost of tariffs on US imports.
The two SUVs that will be affected are the X5 and X6 SUVs – their prices will likely increase from anywhere between four and seven percent, according to Reuters. This price change follows China’s implementation of an original 25 percent tariff on US cars and a more recent increase to 40 percent.
This strategy by China stems from President Trump’s increase in tariffs against the country. He hopes to even the tariff rate between the countries, and consequently, he adopted a tit-for-tat strategy against China to level the playing field.
In fact, other car manufacturers are feeling the pressure of the tariffs too. Ford and Mercedes-Benz are two companies that have announced that it will be raising its prices on exports to China.
Luckily, Trump is not pursuing the same strategy with the European Union, who has been an ally of the US for many years. They will reopen negotiations and hopefully come to a more even agreement.
If the tariffs hold, many companies may end up shifting their factories to China and other foreign countries to keep costs low. This would take away jobs from the US economy, especially from some of President Trump’s constituents.
The economy and its players are surely feeling the pressure of these tariffs, and it will be interesting to see what or who snaps first.