GM, Ford Caught in Middle As U.S., China Trade Battle Heats Up

President Trump’s tariff battle is putting both General Motors and Ford Motor Co. luxury plans under a cloud. Both the U.S. and China have heated up tariffs, even while the president paused other portions of his trade plan.

Though President Donald Trump paused the major portion of his tariff plan for 90-days he notably left out sectoral sanctions covering things like import steel, aluminum, autos and auto parts. And, if anything, the tariffs affecting U.S. and Chinese trade have ramped up, a move that will have a big impact on two U.S. automakers

Both Ford Motor Co. and General Motors have struggled in the Chinese market in recent years but have kept working at gaining a foothold in China for expensive SUVs imported from the U.S. Such plans could not fall apart as tit-for-tat U.S. and Chinese trade sanctions are not covered by Trump’s 90-day tariff pause.

China now plans to slap 34% tariffs on U.S. imports effective April 10. That will deal another blow to the two Detroit automakers. They had hoped to export luxury vehicles to the world’s largest and richest automotive market.

GM ready to boost to new luxury channel in China

The latest U.S.-China trade spot come even as GM was ramping up operations at its new Durand Guild, meant to serve as a channel for importing large U.S.-made vehicles into China, such as the Chevrolet Tahoe.

The Durant Guild has set up a multi-tier sales network geared to more upscale products and, according to Steve Hill, GM’s senior vice president and president of GM China, “Strong performance in Q1 has set a solid foundation for our sustainable and profitable growth through 2025.”

For its part, Lincoln, Ford’s luxury brand, had also began exporting its flagship Navigator SUV to China in an effort to attract affluent luxury brands.

Tariff war engulfs GM, Ford’s luxury plans

China is the third-largest export market for U.S. made vehicles, behind Japan and Germany, though volume fell 13% in 2024, to 109,356 vehicles, reported Automotive News.

Hill’s press release was circulated just as President Donald Trump announced new tariffs in a bid to downsize the U.S. trade deficit. Ironically, the sanctions covering China could work to the opposite effect.

However, the Peoples Republic of China has responded by increasing tariffs on imports from the United States such as luxury sport utility vehicles.  The tit-for-tat tariffs will boost the price of the Lincoln Navigator from $157,000 to more than $210,000.

With the U.S. now set to raise to 125% tariffs on Chinese-made goods there is concern that country could yet raise its own tariff levels on American products.

More Tariff News

• Mazda May Spread the Pain to Reduce Tariff Impact
• UAW Pres. Backtracks on Trump Tariff Support
• Tariffs Could Lower 2025 U.S. Car Sales by 1.8 Mil

Both GM, Ford face tariff challenges

GM, with significant imports and exposure to China, faces more uncertainty and margin pressure compared to Ford, according to analysts from Sungarden YARP Portfolio.

Th Detroit automaker and its joint ventures delivered more than 442,000 units in China in the 2025 first quarter – including both domestic Chinese products and imports — with positive year-on-year sales growth and the third consecutive quarter of sequential gains in market share.

China was already set to see tariffs increase by 34% on Wednesday as part of Trump’s “reciprocal” tariffs package. But the president tacked on another 50% after Beijing did not back off on its promise to impose 34% retaliatory tariffs on US goods by noon Tuesday, adding an additional 84% in duties.

China’s Commerce Ministry also said it “firmly opposes” the additional 50% tariffs on Chinese imports, calling it “a mistake upon a mistake.” The ministry vowed to escalate its retaliation on US exports.