The new tariffs imposed by Trump on Bosch China are expected to have a relatively minor impact, according to the president

Bosch China's president expects minimal impact from new US tariffs due to local production and a strong global layout.

: Robert Bosch GmbH anticipates a minimal effect from new US tariffs on its operations in China, thanks to its worldwide structure and robust local supply chain, as stated by David Xu, Bosch China’s president. Even though China’s new export controls on rare earths have temporarily affected Bosch's operations, the company is currently negotiating with the Ministry of Commerce for export permits. Data from the European Union Chamber of Commerce in China reveals that approximately 44% of companies felt the effects of Beijing’s tariffs, though many have gained an opportunity to surpass US competitors. Additionally, US President Donald Trump’s imposition of a 145% levy on Chinese imports is prompting automakers worldwide to reconsider their strategies, impacting companies like Nissan and Mercedes-Benz.

David Xu, president of Bosch China, recently discussed the implications of the newly imposed US tariffs on Bosch's Chinese operations. Despite uncertainties hanging over global trade relations, Xu maintained that the impact would be minimal due to Bosch’s strategic global layout and its heavily localized supply chain within China. According to Xu, the majority of materials utilized in Bosch’s products are sourced locally. While this limits the immediate impact of US tariffs, Bosch is temporarily feeling the pinch due to China’s new export controls on rare earths—essential in electric motor manufacturing.

Bosch is actively applying for export permits from China's Ministry of Commerce to ease this bottleneck and ensure continued production. Highlighting how multinational companies are navigating the ongoing trade tensions between the US and China, Xu's comments provide an insight into how businesses are adapting to the shifting trade landscape. Information from a survey by the European Union Chamber of Commerce in China corroborates Xu’s observations, revealing that about 44% of businesses surveyed reported impacts from Beijing's tariffs on US goods. However, some firms have seized the opportunity to gain market share from US competitors due to these adjustments.

In the backdrop of these industry shifts, broader market trends are also emerging. US President Donald Trump's decision to enforce a staggering 145% levy on Chinese imports has forced the automotive sector to reassess its strategies significantly. Among others, Japan's Nissan has scaled back plans to export 200,000 vehicles annually from China to the US. Additionally, Mercedes-Benz recently retracted its forecast for 2025 earnings, citing potential profit declines if tariffs persist throughout the year.

Stefan Hartung, chairman of Bosch's board of management, further elaborated during a recent conference call that the company is unable to determine the exact ramifications of these tariffs until later in the year. Nevertheless, Bosch remains optimistic about a modest growth in sales, projecting an increase of up to 3% this year. The company has reiterated its commitment to achieving an operating margin target of 7% by 2026.

Tesla is among the companies needing to pivot in response to the trade challenges; the organization has paused sales of imported vehicles in China. Moreover, Tesla is negotiating for a special export permit from Chinese authorities to produce humanoid robots with magnets. Such strategic pivots underscore the broader implications of trade policies, compelling major market players to innovate and adjust accordingly in the evolving global trade environment.

Sources: TechNode, Financial Times, Reuters

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