(ECNS) -- China's car industry is on the edge of a major shakeup amid ongoing trade tensions between the United States and China, with imported cars certain to see a price rise if the proposed tariffs become reality.
Car dealers in the Beijing Asian Games Village Automobile Exchange Market, the major auto market in North China, have been closely watching the trade dispute, Beijing Youth Daily reported.
In response to the proposed U.S. tariff rate of 25 percent on Chinese exports, the Customs Tariff Commission of the State Council has decided to impose additional tariffs of 25 percent on 106 products, including many automobile products covering almost all major U.S. car brands.
The 25 percent tariff that the U.S. is contemplating against China could cost U.S. automakers more money than their Chinese counterparts. High-end U.S. cars including the Cadillac Escalade SUV, the Buick Enclave, the Chevrolet Camaro, the Lincoln Continental, the Lincoln Navigator, the Lincoln MKC, the Jeep Grand Cherokee and the Jeep Wrangler will see a squeezed market, while the Ford Raptor and the GMC Motorhome are expected to lose their market advantage too.
Cars owned by Japanese and German automakers but produced in the U.S. will also be hit hard if they are to sell in China.
The U.S. exports far more cars to China than it imports from the country, both in terms of car numbers and trade volumes.
A surging tariff means U.S. cars or U.S.-produced cars could be priced out of the world's biggest consumer market. German luxury carmaker Audi AG, which doesn't have a plant in the U.S., has the potential to gain a competitive edge in China.
Shen Hui, the founder of WM Motor Technology Co, one of a new breed of Chinese electric car companies, said the trade war will leave a fertile market for China's local car manufacturers, as Tesla's Model S and Model X will see price increases of more than 130,000 yuan ($20,700).