President Donald Trump fired the biggest shot yet in the global trade war by imposing tariffs on $34 billion of Chinese imports, including auto parts, delivering on a promise to political supporters that risks provoking retaliation and harming the world economy. The duties on Chinese goods went forward just after midnight Friday in Washington. Another $16 billion of goods could follow in two weeks, Trump said Thursday aboard Air Force One en route to Montana, before suggesting the final total could eventually reach $550 billion, a figure that exceeds all of China's annual goods exported to the U.S. China, in retaliation, hiked tariffs on $34 billion in American goods, including U.S. light-vehicle imports, to 40 percent from 15 percent beginning Friday. The duties will have a disproportionate impact on major U.S. vehicle exporters such as Daimler AG's Mercedes-Benz, BMW AG, Ford Motor Co. and Tesla Inc. China imports nearly 270,000 U.S.-made light vehicles annually, worth $11 billion. In comparison, the list of cars and light trucks made in China and shipped to the U.S. is small and includes the Buick Envision compact crossover and Volvo's S60 sedan.
OptimumNano Energy Co., China's third-largest battery maker for electric vehicles, disclosed last week it will suspend battery cell production for six months. The Shenzhen-listed company, which is using less than 23 percent of its production capacity, is far from the only Chinese battery maker in trouble. Burdened with underused plants, dozens of EV battery suppliers have gone out of business in China since 2015. And more likely will meet the same fate down the road. Beijing started offering generous subsidies for EVs in 2009 in the hope that domestic automakers and suppliers could become world-class players in the EV market. EV output has increased substantially across China. Last year, production of electrified vehicles, most of which were battery EVs, jumped 54 percent to approach 800,000. Manufacturing capacity for EV batteries has also surged in tandem. By the end of 2017, combined annual capacity of EV battery makers in China topped 200 gigawatt-hours, double the tally a year earlier.