Trump prods General Motors to move auto plants in China back to US

Tweet comes after report on shrinking domestic workforce of largest US automaker

WASHINGTON • President Donald Trump, who is engaged in a trade war with China, yesterday said the largest US automaker, General Motors (GM), should begin moving its operations back to the US.

"General Motors, which was once the Giant of Detroit, is now one of the smallest auto manufacturers there. They moved major plants to China, BEFORE I CAME INTO OFFICE. This was done despite the saving help given (to) them by the USA. Now they should start moving back to America again?" Mr Trump said in a post on Twitter.

Mr Trump appeared to be referring to a Bloomberg News report that GM's hourly workforce of 46,000 US workers had fallen behind Fiat Chrysler as the smallest of the Detroit Three automakers.

Over the past four decades, GM has dramatically cut the size of its overall US workforce, which numbered nearly 620,000 in 1979.

GM did not immediately comment on Mr Trump's tweets.

Mr Trump's ire with GM comes as contract talks between the United Auto Workers (UAW) union and the Detroit Three automakers intensify ahead of a Sept 14 deadline. Mr Trump had earlier attacked GM for making vehicles in Mexico and ending production at plants in Michigan, Ohio and Maryland. GM's move to close four plants in the United States is a key issue in the contract talks.

China is the world's largest auto market and government policy favours automakers assembling vehicles there, and not importing them from overseas.

In response to Mr Trump's latest tariffs on China products, Beijing said last week it will reinstitute a 25 per cent levy on US-made vehicles.

GM sold 3.6 million vehicles in China last year, accounting for 43 per cent of its worldwide sales. GM booked US$2 billion (S$2.8 billion) in equity income from its China operations last year.

 
 

GM imports a small number of vehicles from China. In June, the Trump administration rejected a GM request to exempt its Chinese-made Buick Envision from a 25 per cent US tariff on sport utility vehicle models. The midsize SUV has become a target for US critics of Chinese-made goods, including leaders of the UAW members in key political swing states like Michigan and Ohio.

Mr Trump on Thursday said China and the US were holding discussions on trade, with more talks scheduled. China's Commerce Ministry also said a September round of meetings was being discussed by the two sides, but that it was important for Washington to cancel a planned tariff increase.

The US announced new tariff rates this month on US$300 billion worth of Chinese goods that will take effect next month and in December. Beijing retaliated, announcing its own higher import taxes.

That prompted a reaction from Mr Trump, who tweeted that existing 25 per cent tariffs on some US$250 billion in imports from China would rise to 30 per cent come Oct 1, the 70th anniversary of the founding of the People's Republic of China. And he further hiked levies on US$300 billion in Chinese goods due tomorrow and Dec 15.

GM UNDER ATTACK

General Motors, which was once the Giant of Detroit, is now one of the smallest auto manufacturers there. They moved major plants to China, BEFORE I CAME INTO OFFICE. This was done despite the saving help given (to) them by the USA.

MR DONALD TRUMP, in a tweet.

Mr Trump is under increasing pressure from Republican senators and others who say that uncertainty on trade is contributing to a US economic slowdown.

A report earlier on Thursday showed US economic growth decelerated in the second quarter by more than initially reported, suggesting Mr Trump's trade actions are weighing more heavily on the pace of expansion.

China yesterday continued to urge dialogue, with Foreign Ministry spokesman Geng Shuang telling a regular briefing in Beijing that the two sides "are maintaining effective communication".

"We hope the US can demonstrate good faith and take real action to work in concert with China and find solutions together on the basis of mutual respect," Mr Geng said.

REUTERS, BLOOMBERG

A version of this article appeared in the print edition of The Straits Times on August 31, 2019, with the headline 'Trump prods GM to move auto plants in China back to US'. Print Edition | Subscribe