FRANKFURT, Germany—Automaker BMW says it will have to raise prices on the U.S.-built SUVs it sells in China due to higher tariffs.

China raised the import tax on cars from the United States to 40 percent in retaliation for higher tariffs on Chinese goods imposed by President Donald Trump.

The dpa news agency reported that the Munich-based company said Monday it is “not in a position to completely absorb the tariff increases.”

BMW builds key SUV models in Spartanburg, South Carolina, where it employs 10,000 people. Those vehicles are exported to 140 countries, making BMW the largest U.S. auto exporter.

Trump has imposed tariffs to counter what he says are unfair trading practices that include Chinese requirements that U.S. firms transfer key technology as the price of doing business.