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GM's German-made Buick highlights risks from trade policy

Reuters logo Reuters 4/4/2017 By Joseph White
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General Motors (GM) on Tuesday unveiled a German-made Buick crossover wagon it plans to sell in the United States, and in so doing highlighted the U.S. auto industry's vulnerability to shifting trade politics.

The Buick Regal TourX, scheduled to launch later this year in the United States, is aimed at imported all-wheel drive vehicles such as those offered by Subaru and Zhejiang Geely Holding's [GEELY.UL] Volvo Cars.

In a plan mapped out long before the Trump administration and Congress began talking about taxing imported goods, GM planned to build the TourX at a factory in Ruesselsheim, Germany, near Frankfurt.

Asked how a potential "border tax" on imported goods could affect the TourX, GM product development chief Mark Reuss told reporters that such a levy might hurt, but added: "I don't know what the border tax is.

"How can you make a product plan based on something you don't know?" he asked.

Reuss said GM is making plans to deal with a border tax, which could affect not just the Regal TourX. GM imports a Buick sport utility vehicle called the Envision from China, and has electric vehicles it needs for the Chinese market that it currently builds only in the United States. China levies steep tariffs and taxes on imported vehicles.

In a separate interview, the head of GM's North American operations said he is encouraged that President Donald Trump and administration officials are listening as auto industry executives explain the complex, global supply chains behind their model lineups.

"It's too early to speculate, but we believe the new administration is more aligned with us than different," said Alan Batey, who runs GM's North American auto business and the Chevrolet brand globally. There is "a very open and constant dialogue" with administration officials, he said.

General Motors Co unveiled a new Buick model called the TourX aimed at Volvo and Subaru's wagons in the United States market in Detroit© REUTERS/Joe White General Motors Co unveiled a new Buick model called the TourX aimed at Volvo and Subaru's wagons in the United States market in Detroit

GM's chief executive, Mary Barra, is a member of an advisory council to President Trump.

The TourX was one of two new Buick models the brand unveiled at GM's design center in suburban Detroit. The other, the Regal Sportback, offered an unusual hatch opening designed to give a car that looks like a sporty coupe the functional utility of a sport utility vehicle. The hatch allows a driver to load cargo onto folded rear seats.

Some engineering and production of the Regal and the TourX relied on GM's Opel operations, which are on track to be sold to France's Peugeot SA. Reuss said that sale does not necessarily mean the end of collaboration between Buick and the German Opel operations.

"Opel is still doing some of our future models," he said.

(Reporting by Joe White; Editing by Dan Grebler)

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