Possible lower tariffs on auto imports.
https://finance.yahoo.com/news/trump-says-china-agreed-cut-tariffs-u-made-043500797--sector.html
"WASHINGTON/SHANGHAI (Reuters) - U.S. President Donald Trump said China had agreed to cut import tariffs on American-made cars, buoying shares in BMW and Daimler AG who manufacture in the United States for export to the world's biggest auto market.
Shares of Chinese car dealers also perked up on hopes that such a move could revitalize the domestic auto market that is poised for its first annual sales contraction in decades amid cooling economic growth and a debilitating U.S.-China trade war.
Trump, fresh from agreeing a 90-day cease-fire in his trade war with China at the meeting of the G20, said on Twitter "China has agreed to reduce and remove tariffs on cars coming into China from the U.S. Currently the tariff is 40%"."
Regarding auto tariffs.
Put aside the lack of detail and confirmation from the Chinese... Let's assume they will severely reduce auto import tariffs.
Whats the summer of the potential impacts of this?
Firstly, WTO rules will require that they apply to all trading nations. That means Japan, Korea, Europe, & India will also have greater access to the Chinese market. A good thing.
Does that mean US auto exports will skyrocket? Well, what do we have that will sell there?
As the Ford and GM strategic announcements have demonstrated, the US domestic market is moving away from cars heavily and moving into trucks and SUVs. The factories we use to make cars are shuttering. Do we think the Chinese auto market as a big unmet need for large trucks? Or are they going to want smaller low-cost vehicles that may be better served by other manufacturers? Remember they can buy from Korea, Japan or anywhere else no guarantees it's from the US.
Secondly, in terms of auto manufacturing, when there are large volume sold the manufacturer will try to place a factory in the market in which they are sold. This is why GM has a car plans ready in China. What is not efficient, not a Lean manufacturing technique, is to assemble cars here and then ship them to the other side of the planet. So what volumes we are likely to be able to produce are going to be small market niche items. If sales really take off one of these items, just watch the manufacturer open a factory in China and move those jobs there.
So is this a potentially good move for world trading markets? Yes if it actually happens. Does this mean a huge influx of jobs into the domestic manufacturing sector. Not necessarily, we have to compete strongly on cost to sell in China, this is not our strong suit.
Lastly, in order to be able to produce items cheaper, we will need to be able to use the entire North American supply chain, which means low-cost manufactured in Mexico. This is something that Trump has also gone after, to try to force jobs here in the US for components, but that will raise their cost and make the overall assembled vehicle less competitive in the Chinese market, so which way are we going on this?
We can't afford to raise cost on cars manufactured in the US, (which are already uncompetitive and unprofitable, andhave been exited by the domestic manufacturers,) and then turn around and be able to expect to sell into an even more competitive Chinese market.
So who is likely to benefit, probably some luxury items, like BMW's, Tesla's and maybe whatever else we make here on the luxury side.