WASHINGTON/STOCKHOLM (Reuters) - The United States has rejected separate requests from General Motors Co and Chinese-owned Volvo Cars for an exemption to a 25% U.S. tariff on their Chinese-made sport utility vehicle models.

FILE PHOTO: The GM logo is seen at the General Motors plant in Sao Jose dos Campos, Brazil, January 22, 2019. REUTERS/Roosevelt Cassio

GM, the largest U.S. automaker, and Sweden’s Volvo both said they were aware of the respective denials of their nearly year-old petitions. Both companies had not raised the sticker price to account for tariffs, which came into play last July.

The denial of GM’s petition for its Buick Envision came in a May 29 letter from the U.S. Trade Representative’s office saying the request concerned “a product strategically important or related to ‘Made in China 2025’ or other Chinese industrial programs.”

The midsize SUV, with a starting price of about $35,000, has become a target for U.S. critics of Chinese-made goods, including leaders of the United Auto Workers union and members in key political swing states such as Michigan and Ohio.

Buick Envision sales fell in the United States by nearly 27% to 30,000 last year and fell another 21% in the first three months of 2019.

Only a small number of vehicles are built in China and sold in the United States.

Last month, the U.S. Trade Representative’s Office also rejected a request by Volvo Cars for its mid-size XC60 SUVs, its top selling U.S. vehicle.

Volvo, which is owned by China’s Geely, had already last year begun switching production of U.S.-bound XC60s from China to Europe as part of a global shake up of production plans for most of its lineup in an effort to dodge tariffs.

A spokeswoman said the XC60 shift, Volvo’s biggest move to mitigate the impact of tariffs, was completed in the Spring, meaning Volvo was no longer paying tariffs on XC60 imports and would not see any fresh cost impact due to the rejection.

Volvo had argued in its exemption request that it could “anticipate” the XC60 would be eventually produced in its recently opened South Carolina plant, where it is building S60 sedans, but the spokeswoman said no decision had been taken.

“(New production setup) is a cost so that would of course depend on the permanence of tariffs and what the situation looks like going forward. It’s a continuous evaluation that we always do with the flexible manufacturing footprint,” she said.

Besides the shift, Volvo has also split production of its S60 luxury sport sedan between the two countries; altered some European production plans; and reduced shipments of its S90 sedan, which is only produced in China, to the United States.

U.S. retail sales for the S90 sedan this year to May were down 63.7 percent year on year, company data showed.

GM had argued in its request that Envision sales in China and the United States would generate funds “to invest in our U.S. manufacturing facilities and to develop the next generation of automotive technology in the United States.”

FILE PHOTO: General Motors Co. displays its U.S. version of the Buick Envision crossover, the first China-built car imported to the U.S. by a Detroit automaker, during a media event before the start of the North American International Auto Show in Detroit, Michigan, January 10, 2016. REUTERS/Rebecca Cook

GM said last year the “vast majority” of Envisions, about 200,000 a year, are sold in China.

Because of the lower U.S. sales volume, “assembly in our home market is not an option” for the Envision, which competes with such mid-size crossover vehicles as the Jeep Grand Cherokee and the Cadillac XT5.

Ahead of the July 2018 start for higher import tariffs, GM shipped in a six-month supply of Envisions at the much lower 2.5 percent tariff rate, Reuters reported in August 2018. </s> The U.S. Trade Representative has denied a request by Volvo Cars for an exemption to 25 percent tariffs imposed on Chinese-made vehicles that are imported to the United States.

The denial came in a May 29 letter, according to news reports. Volvo had been seeking an exemption for its XC60 SUV.

The ruling is a moot point for Volvo because the automaker has already moved XC60 production for the U.S. market to its plant in Torslanda, Sweden.

The tariffs are on hold while China and the U.S. continue talks over trade disagreements.

Volvo had piggybacked on a similar request by General Motors for its Buick Envision sport-utility vehicle. U.S. officials also denied an exemption in that case.

The mid-size XC60 is one of Volvo's top sellers in the United States, with 11,758 units sold through the first five months of this year — a 4.6% increase over 2018. The vehicle is second only to the larger XC90 in terms of U.S. sales.

Volvo builds its S60 sedan at a $1.1 million manufacturing campus off Interstate 26 near Ridgeville. The automaker, based in Sweden and owned by China's Geely Holding Group, plans to add production of the XC90 at the Charleston-area plant by 2021, when employment at the site is expected to top 4,000 people. </s> Washington/Stockholm — The US has rejected separate requests from General Motors (GM) and Chinese-owned Volvo Cars for an exemption to a 25% US tariff on their Chinese-made SUV models.

GM, the largest US vehicle maker, and Sweden’s Volvo both said they were aware of the respective denials of their nearly year-old petitions. Both companies have not raised the sticker price to account for tariffs, which came into play last July.

The denial of GM’s petition for its Buick Envision came in a May 29 letter from the US trade representative’s office saying the request concerned “a product strategically important or related to ‘Made in China 2025’ or other Chinese industrial programmes”.

The mid-size SUV, with a starting price of about $35,000, has become a target for US critics of Chinese-made goods, including leaders of the United Automobile Workers union and members in key political swing states, such as Michigan and Ohio.

Buick Envision sales fell in the US by nearly 27% to 30,000 in 2018 and fell another 21% in the first three months of 2019. Only a small number of vehicles are built in China and sold in the US.

In May, the US trade representative’s office also rejected a request by Volvo Cars for its mid-size XC60 SUVs, its top selling US vehicle.

Volvo, which is owned by China’s Geely, already began switching production of US-bound XC60s from China to Europe in 2018 as part of a global shake up of production plans for most of its line-up in an effort to dodge tariffs. </s> The GM logo is seen at the General Motors plant in Sao Jose dos Campos

WASHINGTON (Reuters) - The Trump administration has denied a General Motors Co request for an exemption to a 25 percent U.S. tariff on its Chinese-made Buick Envision sport utility vehicle.

The denial of the nearly year-old petition came in a May 29 letter from the U.S. Trade Representative's office saying the request concerns "a product strategically important or related to 'Made in China 2025' or other Chinese industrial programs."

The midsize SUV, priced starting at about $35,000, has become a target for critics of Chinese-made goods, including leaders of the United Auto Workers union and members in key political swing states such as Michigan and Ohio.

GM said on Tuesday it was aware of the denial and has been paying the tariff since July. GM has not raised the sticker price to account for the tariff.

Buick Envision sales fell in the United States by nearly 27% to 30,000 last year and fell another 21% in the first three months of 2019.

Only a small number of vehicles are built in China and sold in the United States.

Last month, the U.S. Trade Representative's Office also denied a request by Chinese-owned Volvo Cars for tariff exemptions for mid-size SUVs assembled in China after the automaker sought an exemption for the XC60, its top selling U.S. vehicle.

GM, the largest U.S. automaker, argued in its request that Envision sales in China and the United States would generate funds “to invest in our U.S. manufacturing facilities and to develop the next generation of automotive technology in the United States.”

GM said last year the “vast majority” of Envisions, about 200,000 a year, are sold in China.

Because of the lower U.S. sales volume, "assembly in our home market is not an option" for the Envision, which competes with such mid-size crossover vehicles as the Jeep Grand Cherokee and the Cadillac XT5.

Ahead of the July 2018 start for higher import tariffs, GM shipped in a six-month supply of Envisions at the much lower 2.5 percent tariff rate, Reuters reported in August 2018. </s> related media assets (image or videos) available. Click to see the gallery.

2 related media assets (image or videos) available. Click to see the gallery.

The Trump administration has denied a General Motors Co request for an exemption to a 25 percent U.S. tariff on its Chinese-made Buick Envision sport utility vehicle.

WASHINGTON: The Trump administration has denied a General Motors Co request for an exemption to a 25 percent U.S. tariff on its Chinese-made Buick Envision sport utility vehicle.

The denial of the nearly year-old petition came in a May 29 letter from the U.S. Trade Representative's office saying the request concerns "a product strategically important or related to 'Made in China 2025' or other Chinese industrial programs."

The midsize SUV, priced starting at about US$35,000, has become a target for critics of Chinese-made goods, including leaders of the United Auto Workers union and members in key political swing states such as Michigan and Ohio.

GM said it was aware of the denial and has been paying the tariff since July. GM has not raised the sticker price to account for the tariff. </s> WASHINGTON (Reuters) - The Trump administration has denied a General Motors Co request for an exemption to a 25 percent U.S. tariff on its Chinese-made Buick Envision sport utility vehicle.

The denial of the nearly year-old petition came in a May 29 letter from the U.S. Trade Representative’s office saying the request concerns “a product strategically important or related to ‘Made in China 2025’ or other Chinese industrial programs.”

The midsize SUV, priced starting at about $35,000, has become a target for critics of Chinese-made goods, including leaders of the United Auto Workers union and members in key political swing states such as Michigan and Ohio.

GM said it was aware of the denial and has been paying the tariff since July. GM has not raised the sticker price to account for the tariff. </s> SEOUL (Reuters) - The United States and South Korea agreed to revise a trade pact sharply criticized by U.S. President Donald Trump, Seoul said on Monday, with U.S. automakers winning improved market access and Korean steelmakers hit with quotas but avoiding hefty tariffs.

The planned changes in the U.S.-Korea Free Trade Agreement (KORUS) were seen as limited, leaving South Korea’s key passenger car exports untouched and helping soothe fears that Trump’s tough approach could start a spiraling global trade war.

In April, Trump told Reuters he would either renegotiate or terminate what he called a “horrible” trade deal that has doubled the U.S. goods trade deficit with South Korea since 2012.

Asian shares steadied on Monday, stemming last week’s hefty losses after Trump’s action on steel and aluminum, and his plans to slap tariffs on up to $60 billion in Chinese goods.

The agreement means South Korea will be forced to cut its steel exports to the U.S. by 30 percent of the past three years’ average, in exchange for becoming the first U.S. ally to receive an indefinite exemption on steel tariffs imposed by Trump.

“We had heated discussions,” South Korean Trade Minister Kim Hyun-chong said at a media briefing in Seoul. “The latest agreement removed two uncertainties,” he said, referring to steel tariff exemptions and KORUS renegotiation.

The U.S. Trade Representative’s office in Washington did not respond on Monday morning to requests for comment on the announcements in Seoul. But White House trade adviser Peter Navarro told CNBC television, “It looks like we’re going to have a very, very good result” from the negotiations with South Korea.

Last week, Trump temporarily excluded six trade partners, including Canada, Mexico and the European Union from import duties of 25 percent on steel and 10 percent on aluminum, which came into effect on Friday.

South Korea has received a quota of about 2.68 million tonnes of steel exports, or 70 percent of the annual average Korean steel exports to the United States between 2015-2017, which will be exempt from the new tariffs, the ministry said in a statement.

South Korea is not allowed to export steel products exceeding that quota to the U.S. market, a ministry official said.

“This leaves a bad precedent of exchanging steel tariffs - which is a breach of international trade law - for a legitimate free trade agreement, in negotiations,” said Wonmog Choi, professor of law at Ewha Womans University.

South Korea is the third-largest steel exporter to the United States and the world’s top importer of Chinese steel, leading to concerns it was a conduit for China’s excess capacity.

Trump was elected in 2016 after promising to punish what he saw as unfair trade practices by other countries, particularly China.

While Trump was adamant the KORUS deal needed renegotiating, the trade spat risked undermining relations between Seoul and Washington at a crucial time, as Washington and Seoul work closely to try to contain a nuclear-armed North Korea.

“We are at a time when U.S.-South Korea cooperation is needed more than ever ahead of the inter-Korean summit and the summit between North Korea and the United States,” said a senior official at South Korea’s presidential Blue House, who was not authorized to speak to media.

South Korean officials said that while the deal agreed was the best they could hope for, further pressure on trade was likely under Trump’s presidency.

Shares in South Korean steelmakers rallied on Monday, with Dongbu Steel leading gains as tariff exemptions were confirmed.

U.S. shares also climbed on Monday after steep falls last week as fears of a U.S.-China trade war eased on news that U.S. Treasury Secretary Steven Mnuchin and U.S. Trade Representative Robert Lighthizer were negotiating to resolve difference with their Chinese counterparts.

As part of the KORUS revision, the countries agreed to extend U.S. tariffs on Korean pickup trucks by 20 years until 2041.

No South Korean automakers currently export pickup trucks to the United States, but Hyundai Motor said last year it planned to launch a model there to catch up with a shift away from sedans.

Hyundai said on Monday it was “too early to elaborate on the details such as the estimated timing of the model release and production location”. Its shares fell 1.3 percent.

Under KORUS revisions, U.S. automakers will be able to bring into South Korea 50,000 vehicles per automaker per year that meet U.S. safety standards, not necessarily Korean standards, up from 25,000 vehicles previously.

Kim said no automakers previously exceeded the 25,000-vehicle threshold. Ford Motor Co and General Motors each shipped fewer than 10,000 vehicles last year.

“I don’t see a high chance of automakers expanding U.S. imports,” he said. </s> SEOUL (Reuters) - The United States and South Korea agreed to revise a trade pact sharply criticized by U.S. President Donald Trump, Seoul said on Monday, with U.S. automakers winning improved market access and Korean steelmakers hit with quotas but avoiding hefty tariffs.

The planned changes in the U.S.-Korea Free Trade Agreement (KORUS) were seen as limited, leaving South Korea's key passenger car exports untouched and helping soothe fears that Trump's tough approach could start a spiraling global trade war.

In April, Trump told Reuters he would either renegotiate or terminate what he called a "horrible" trade deal that has doubled the U.S. goods trade deficit with South Korea since 2012.

Asian shares steadied on Monday, stemming last week's hefty losses after Trump's action on steel and aluminum, and his plans to slap tariffs on up to $60 billion in Chinese goods.

The agreement means South Korea will be forced to cut its steel exports to the U.S. by 30 percent of the past three years' average, in exchange for becoming the first U.S. ally to receive an indefinite exemption on steel tariffs imposed by Trump.

"We had heated discussions," South Korean Trade Minister Kim Hyun-chong said at a media briefing in Seoul. "The latest agreement removed two uncertainties," he said, referring to steel tariff exemptions and KORUS renegotiation.

The U.S. Trade Representative's office in Washington did not respond on Monday morning to requests for comment on the announcements in Seoul. But White House trade adviser Peter Navarro told CNBC television, "It looks like we're going to have a very, very good result" from the negotiations with South Korea.

Last week, Trump temporarily excluded six trade partners, including Canada, Mexico and the European Union from import duties of 25 percent on steel and 10 percent on aluminum, which came into effect on Friday.

South Korea has received a quota of about 2.68 million tonnes of steel exports, or 70 percent of the annual average Korean steel exports to the United States between 2015-2017, which will be exempt from the new tariffs, the ministry said in a statement.

South Korea is not allowed to export steel products exceeding that quota to the U.S. market, a ministry official said.

"This leaves a bad precedent of exchanging steel tariffs - which is a breach of international trade law - for a legitimate free trade agreement, in negotiations," said Wonmog Choi, professor of law at Ewha Womans University.

South Korea is the third-largest steel exporter to the United States and the world's top importer of Chinese steel, leading to concerns it was a conduit for China's excess capacity.

Trump was elected in 2016 after promising to punish what he saw as unfair trade practices by other countries, particularly China.

While Trump was adamant the KORUS deal needed renegotiating, the trade spat risked undermining relations between Seoul and Washington at a crucial time, as Washington and Seoul work closely to try to contain a nuclear-armed North Korea.

"We are at a time when U.S.-South Korea cooperation is needed more than ever ahead of the inter-Korean summit and the summit between North Korea and the United States," said a senior official at South Korea's presidential Blue House, who was not authorized to speak to media.

South Korean officials said that while the deal agreed was the best they could hope for, further pressure on trade was likely under Trump's presidency.

Shares in South Korean steelmakers rallied on Monday, with Dongbu Steel leading gains as tariff exemptions were confirmed.

U.S. shares also climbed on Monday after steep falls last week as fears of a U.S.-China trade war eased on news that U.S. Treasury Secretary Steven Mnuchin and U.S. Trade Representative Robert Lighthizer were negotiating to resolve difference with their Chinese counterparts.

As part of the KORUS revision, the countries agreed to extend U.S. tariffs on Korean pickup trucks by 20 years until 2041.

No South Korean automakers currently export pickup trucks to the United States, but Hyundai Motor said last year it planned to launch a model there to catch up with a shift away from sedans.

Hyundai said on Monday it was "too early to elaborate on the details such as the estimated timing of the model release and production location". Its shares fell 1.3 percent.

Under KORUS revisions, U.S. automakers will be able to bring into South Korea 50,000 vehicles per automaker per year that meet U.S. safety standards, not necessarily Korean standards, up from 25,000 vehicles previously.

Kim said no automakers previously exceeded the 25,000-vehicle threshold. Ford Motor Co and General Motors each shipped fewer than 10,000 vehicles last year.

"I don't see a high chance of automakers expanding U.S. imports," he said. </s> SEOUL (Reuters) - The United States and South Korea agreed to revise a trade pact sharply criticized by U.S. President Donald Trump, Seoul said on Monday, with U.S. automakers winning improved market access and Korean steelmakers hit with quotas but avoiding hefty tariffs.

The planned changes in the U.S.-Korea Free Trade Agreement (KORUS) were seen as limited, leaving South Korea’s key passenger car exports untouched and helping soothe fears that Trump’s tough approach could start a spiraling global trade war.

In April, Trump told Reuters he would either renegotiate or terminate what he called a “horrible” trade deal that has doubled the U.S. goods trade deficit with South Korea since 2012.

Asian shares steadied on Monday, stemming last week’s hefty losses after Trump’s action on steel and aluminum, and his plans to slap tariffs on up to $60 billion in Chinese goods. [MKTS/GLOB]

The agreement means South Korea will be forced to cut its steel exports to the U.S. by 30 percent of past three years’ average, in exchange for becoming the first U.S. ally to receive an indefinite exemption on steel tariffs imposed by Trump.

“We had heated discussions,” South Korean Trade Minister Kim Hyun-chong said at a media briefing in Seoul. “The latest agreement removed two uncertainties,” he said, referring to steel tariff exemptions and KORUS renegotiation.

Last week, Trump temporarily excluded six trade partners, including Canada, Mexico and the European Union from higher U.S. import duties on steel and aluminum which came into effect on Friday.

South Korea has received a quota of about 2.68 million tonnes of steel exports, or 70 percent of the annual average Korean steel exports to the United States between 2015-2017, which will be exempt from the new tariffs, the ministry said in a statement.

South Korea is not allowed to export steel products exceeding that quota to the U.S. market, a ministry official said.

“This leaves a bad precedent of exchanging steel tariffs - which is a breach of international trade law - for a legitimate free trade agreement, in negotiations,” said Wonmog Choi, professor of law at Ewha Womans University.

South Korea is the third-largest steel exporter to the United States and the world’s top importer of Chinese steel, leading to concerns it was a conduit for China’s excess capacity.

Trump was elected in 2016 after promising to punish what he saw as unfair trade practices by other countries, particularly China.

While Trump was adamant the KORUS deal needed renegotiating, the trade spat risked undermining relations between Seoul and Washington at a crucial time, as Washington and Seoul work closely to try to contain a nuclear-armed North Korea.

“We are at a time when U.S.-South Korea cooperation is needed more than ever ahead of the inter-Korean summit and the summit between North Korea and the United States,” said a senior official at South Korea’s presidential Blue House, who was not authorized to speak to media.

South Korean officials said that while the deal agreed was the best they could hope for, further pressure on trade was likely under Trump’s presidency.

“If President Trump becomes a two-term president ... I believe there will be continuous (trade) risks during that time,” Trade Minister Kim said.

Shares in South Korean steelmakers rallied on Monday, with Dongbu Steel (016380.KS) leading gains as tariff exemptions were confirmed.

South Korea’s steel association said in a statement it was a “relief” that South Korea has been excluded from U.S. steel tariffs, but regrettable it was unable to secure higher quotas.

As part of the KORUS revision, the countries agreed to extend U.S. tariffs on Korean pickup trucks by 20 years until 2041.

No South Korean automakers currently export pickup trucks to the United States, but Hyundai Motor (005380.KS) said last year it planned to launch a model there to catch up with a shift away from sedans.

Hyundai said on Monday it was “too early to elaborate on the details such as the estimated timing of the model release and production location”. Its shares fell 1.3 percent.

Under KORUS revisions, U.S. automakers will be able to bring into South Korea 50,000 vehicles per automaker per year that meet U.S. safety standards, not necessarily Korean standards, up from 25,000 vehicles previously.

Kim said no automakers previously exceeded the 25,000-vehicle threshold. Ford Motor Co (F.N) and General Motors (GM.N) each shipped fewer than 10,000 vehicles last year.

“I don’t see a high chance of automakers expanding U.S. imports,” he said.

Kim Jong-hoon, a former chief negotiator for the KORUS FTA, said South Korea had fared relatively well in negotiations.

“South Korea gave concessions in autos in return for steel tariff exemptions,” he told Reuters. “This is not a free trade, but a managed trade.”
The United States rejects separate requests from General Motors and Chinese-owned Volvo Cars for an exemption to the new 25 percent tariffs on their Chinese-made sport utility vehicle models.