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BMW to build more SUVs in China in response to tariffs

by Drew Johnson

BMW is trying to work around a 40 percent import tax.

BMW will build more of its popular SUVs models in China in order to skirt recently implemented tariffs, the German automaker confirmed this week.

Following stiff tariffs imposed on China by the Trump administration, the Chinese government responded with a 40 percent tax on SUVs imported from the U.S. That's bad news for BMW as it builds the vast majority of its SUV models at a plant in Spartanburg, South Carolina. In order to skirt those tariffs, BMW will build more of its SUVs in China.

The automaker says it will also be forced to raise the price of U.S.-made vehicles shipped to China, because it is "not in a position to completely absorb the tariff increases,” according to .

Although BMW will be building more SUVs in China, the company won't be reducing output at its South Carolina plant, a spokesperson confirmed to . BMW exports vehicles made in Spartanburg to 140 countries, and there is enough SUV demand to keep the plant cranking even if it's making fewer vehicles for China. However, that could change if a full-blown trade war breaks out.

Earlier this week BMW announced a deal with its China partner Brilliance Automotive to boost BMW production in China to 520,000 units annually by 2019. The German automaker will also build its iX3 electric SUV in China for the global market.

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