Mary Barra, CEO of General Motors (GM), the largest carmaker in the U.S, applauds China for slashing tariffs on imported vehicles to 15%, but suggests more work needs to be done to create fair trade.
“General Motors has supported free trade agreements. We’re free traders by definition,” she told Goldman Sachs CEO Lloyd Blankfein on Wednesday as part of the bank’s “Talks at GS” series.
While lowering tariffs would be a “good step,” Barra doesn’t think the competitive landscape is fair enough. “We want to compete to win based on merit. I think there’s [an] opportunity there to create a level playing field, which we don’t have today,” she said.
China has been imposing a 25% tariff on imported vehicles. The reduced tariff will be effective July 1. The U.S. has a 2.5% import duty on foreign passenger cars. Barra said a level playing field is not just about tariffs, but also about non-tariff barriers like regulatory requirements.
GM’s philosophy is to “build where we sell”, Barra said. Currently GM owns 10 joint ventures in China, which requires carmakers to establish joint ventures with domestic counterparts if they want to build production facilities in the country.
Those made-in-China cars don’t just serve the booming market itself — GM now also imports cars from China for U.S. consumers. The Buick Envision crossover, the first car that GM imported to the U.S. from China, has become the No. 3 selling Buick model in the U.S., with 41,040 sold last year.
That’s why the tariff cut in China — GM’s largest retail market — will actually have little impact on boosting the automakers bottom line.
“I think 15% is an improvement over 25%,” Barra said, “I’d like to see it be level, the same going back and forth, or just open up the markets and let us compete.”
Krystal Hu covers technology and economy for Yahoo Finance. Follow her on Twitter.