BMW's plan to make China a hub for its electric cars export is on hold because of the uncertainty of potential trade tariffs as China and the United States continues with the trade talks.
The United States and China continuously negotiate their disagreements in each other's trade policy. The trade dispute between the two nations has been running for months since it started in 2018. Since then the two nations slapped each other with billions worth of tariffs on each other's products.
The President of the United States, Donald Trump, announced on December that he will impose additional tariffs on Chinese goods if they are unable to make a deal before March 1. He, however, said that he is willing to extend the deadline in exchange for a deal. In February, the president said that the talks between the two nation's trade representatives are moving with great developments. The two sides, however, failed to agree in some crucial criteria in their trade policies causing them to fail in closing a trade deal until the now, days after the President's deadline. Traders on both sides are uncertain whether the two sides will start imposing additional tariffs on each other since they failed to make a deal.
Recently, Trump threatened that he will increase tariffs to 25 percent from 10 percent on $200 billion worth of Chinese products. According to BMW's chief executive, Harald Krueger, the uncertainty is making it hard for BMW to take a decision about exports. He said that they have no basis for taking a decision at the moment whether this is financially viable and whether it makes sense needs to be evaluated.
Last year, the company bought the majority of the share of Brilliance, its Chinese joint Venture partner, and announced that they are planning to construct an electric version of its X3 sport-utility vehicle in Brilliance's plant in China.
The company also made a deal with China's Great Wall to build an electric version of the Mini. Peter Schwarzenbauer, the company's board member responsible for Mini said in an interview with Reuters that the decision to export the electric Mini to China is an open question. He said that it is probably the most strategic question that they have discussed over the past two or three years. He added that, with all the uncertainty around tariffs, he wouldn't be able to give a good answer to what will happen.
