GM Might Drop The Buick Envision If It’s Not Given A Tariff Exemption

In June, the Trump administration announced plans to implement a 25 percent tariff on $50 (£38.4 / €43.1) billion worth of Chinese goods including automobiles. This put Volvo and General Motors in a tough spot as both import Chinese-made vehicles into the United States.

At the time, General Motors acknowledged the Buick Envision would be likely be affected and reports suggested the tariffs could raise the cost of the vehicle by $8,000 (£6,148 / €6,905). If Buick were to pass those costs onto consumers, the base price of the 2019 Envision would jump from $32,990 (£25,352 / €28,472) to $40,990 (£31,500 / €35,377).

The massive price increase would undoubtedly impact sales and this would be extremely damaging as the crossover is one of the brand’s best-selling models in the United States. Last year alone, Buick sold 41,040 Envisions in America and this means the crossover outperformed the Regal and LaCrosse combined.

Given the importance of the model, GM Executive Vice President and General Counsel Craig Glidden sent a letter to U.S. Trade Representative Robert Lighthizer asking for the government to exclude the Envision from the tariffs. The letter (PDF) was first noticed by Rueters and it asked the United States to exclude tariffs on 40,000 Envisions annually.

The letter went on to say the “Envision is made in China for the Chinese market, but importing some of them into the United States is critical in rounding out the Buick portfolio to compete against foreign competitors in the U.S.” Glidden went on to describe the number of imports as “small” and not enough to justify building the crossover in the United States.

Glidden didn’t hold back as he said “A 25 percent tariff on the Envision may eliminate the vehicles from Buick’s U.S. offerings.” He went on to say that if Buick dropped the Envision in the United States, it would be a “significant blow” to the brand as well as its customers and dealers.

While Glidden didn’t specifically say the company would drop the Envision, he strongly hinted it might be necessary. As he explained, “… rather than pay a 25 percent duty and import the vehicles at a loss, which could negatively impact the company and our employees, GM may need to cease selling the Buick Envision in the U.S. market altogether.”

As part of the request, GM highlighted the fact that the Envision and Chinese sales are beneficial to the automaker and the United States. The company noted money generated from the model is used for to pay for the development of electric vehicles and fuel cell systems – among other things. The automaker also noted a lot of this research in done in the United States at the Milford Proving Grounds and GM Tech Center.

Even if the government doesn’t approve the exemption, it could be several months before GM is forced to make a decision about dropping the model in the United States. Reuters says the company has enough inventory to meet demand through the end of the year, so the Envision is safe for now.