To avoid tariffs, Honda shifts SUV production to China

By Supply Chain Solutions in SCS Blog on

To avoid tariffs, Honda shifts SUV production to China

The entire automotive supply chain faces rising prices and uncertainty around supplies as the trade wars linger. For example, steel prices have increased 50% since the tariffs went into effect. Meanwhile, thousands of U.S. companies are waiting on the U.S. Department of Commerce to review requests to exclude products from the tariffs.

The move could reduce output from three Honda plants in Ohio that produce engines, transmissions and all-wheel-drive systems for the Acura model, according to Zero Hedge. The tariff tiff is leading other automakers, including Volvo, to reconsider their plans for U.S. production bound for the Chinese market.

While the vehicles produced in China won't be subject to the tariffs, some components might still be subject to the additional tax. Other automakers, including BMW Group and Daimler, hiked the sticker price of vehicles imported to China from the U.S. to cover the higher import costs.

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