President Donald Trump's escalating trade war with China has one automaker based in the world's largest country pumping the brakes, which may reduce competition for other Chinese automakers racing to launch in the U.S.
GAC said last week that it is postponing the rollout of its dealership network, which had been slated for 2020, following the Trump administration's decision to ratchet up tariffs on Chinese goods amid a lack of progress in trade talks.
GAC, which has a successful joint venture in China making and selling Jeeps with Fiat Chrysler Automobiles, sought to be the first Chinese automaker to break into the U.S. and has been meeting with potential retailers, including over 80 dealers and partners at the NADA Show in San Francisco this year. But trade tensions have now delayed its progress for a second time. Just last year, GAC postponed its original plans to launch in late 2019.
"Due to the uncertainty of the U.S.-China trade relationship, we've postponed our entry into the U.S. market temporarily," said Zeng Hebin, international president of GAC Motor, in an interview with CNBC. "As to when we will enter that market, we will discuss and decide later depending on the developments with respect to trade."
Meanwhile, Chinese counterparts Zotye USA and Lynk & CO said last week their U.S. plans are on track.
Although Trump has been threatening since his presidential campaign to crack down on what he calls unfair trade practices, analysts see the escalation of the dispute with China as a major development. Chinese companies could interpret the move as a next-level threat.
And unresolved trade disputes revolving around the auto industry affect more than just China. The United States-Mexico-Canada Agreement, the replacement for the North American Free Trade Agreement, is stalled in Congress, and the Trump administration continues to threaten a 25 percent tariff on imported autos and auto parts from around the world.