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US rejects General Motors tariff relief request for Chinese-built SUV

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US rejects General Motors tariff relief request for Chinese-built SUV

The Office of the U.S. Trade Representative has denied General Motors Co.'s request for an exemption to a 25% U.S. tariff on its Chinese-built Buick Envision SUV, Reuters reported June 4.

In a letter dated May 29, the USTR reportedly told General Motors that the product involved is "strategically important or related to 'Made in China 2025' or other Chinese industrial programs." Made in China 2025 is a Chinese government initiative to expand the country's expertise in 10 strategic industries dominated by the U.S.

General Motors said in its request that Envision sales in China and the U.S. would raise funds to invest in its domestic factories and the development of next-generation automotive technology in the U.S.

The Detroit-based carmaker has acknowledged the denial but has not raised the SUV's price, which starts at about $35,000, to account for the tariff that it has been paying since July, Reuters reported.

General Motors previously said that home market assembly "is not an option" due to lower U.S. sales volume and competition from other midsize SUVs such as the Jeep Grand Cherokee and Cadillac XT5, the news outlet added.

According to the news wire, Envision sales in the U.S. dropped almost 27% to 30,000 units in 2018 and further slid by 21% in the first trimester of 2019. Prior to the start of higher import tariffs in July 2018, the company stocked up a six-month supply of Envisions with only a 2.5% tariff, the report noted.

In May, the USTR also denied Tesla Inc.'s request to exclude its Autopilot driver assistance system from tariffs on Chinese-made products.