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BMW no longer exports its South Carolina-made X3 SUV to China, but said U.S. sales have more than made up for any production loss tied to that decision. File

BMW has stopped exporting South Carolina-made X3 SUVs to China and might build more cars in that country amid a trade war that's expected to cost the German automaker roughly $350 million this year.

Nicolas Peter, the company's chief financial officer, told media outlets on Wednesday that BMW has shifted some production of the X3 — once made exclusively in Spartanburg County — and will decide in a few weeks if another SUV will be added to a production facility in China.

It's not clear whether any production or jobs at BMW's Greer campus would be affected by that decision. The company says moving some X3 production overseas hasn't affected the Upstate site.

The move would be designed to avoid 40 percent import duties China has imposed U.S.-built cars in retaliation for President Donald Trump's tariffs on Chinese goods.

The news came as BMW announced a 24 percent drop in profit for the third quarter, including a 40 percent decline in its core automotive business.

The carmaker blamed the plunge on a mix of political and economic headwinds, including stricter emissions standards in Europe, fallout from Brexit, higher costs and trade tensions.

"The trade dispute between the U.S. and China is straining the entire global economy," said Harold Kruger, BMW's chairman.

Kruger said building X3s in China has "somewhat reduced" tariff costs, but the company ultimately is "hoping for a pragmatic solution" to the trade stalemate. 

The decision to build some X3 vehicles overseas hasn't hurt the South Carolina plant's production, BMW said, because increased U.S. sales of the popular SUV have more than replaced the number that used to be exported to China.

"Sales of the X3 reached an all-time high in the U.S. in September," said Steve Wilson, a spokesman for BMW's Upstate plant.

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Wilson said the X3 has been the company's top-selling model in the U.S. for eight consecutive months and "production at our plant is several thousand units above what it was a year ago."

BMW said the profit margin on automotive sales company-wide fell to 4.4 percent from 8.6 percent.

"The global environment is likely to stay volatile for the foreseeable future and the level of complexity will remain just as challenging," Kruger said.

BMW's Upstate campus is the automaker's largest, employing 10,000 people and producing more than 370,000 SUVs last year — roughly 70 percent of them exported to foreign countries through the Port of Charleston. BMW said it still has plans to invest another $600 million in the plant by the end of 2021, bringing the company's total investment to more than $8 billion.

BMW builds the X3, X4, X5 and X6 at the Spartanburg County plant and will introduce its largest model, the X7, later this year.

Wire reports contributed to this report. Reach David Wren at 843-937-5550 or on Twitter at @David_Wren_