SOUTH CAROLINA, U.S. - As the full impact of tariffs hit vehicles, German automaker BMW has announced that it would be moving production of some of its SUVs out of the U.S.

The automaker has announced that it has signed an agreement with its Chinese partner, Brilliance Automotive Group Holdings, to increase the number of vehicles produced in the country.

A report pointed out that as per the deal, BMW will increase production in China to 520,000 by 2019.

In its statement, BMW CEO Harald Krueger said, “Our agreement sets a long-term framework for our future in China — a future involving continued investment, further growth and a clear commitment to the development and production of electric vehicles.”

Further, the company has also announced that it will raise prices for U.S.-produced SUVs sold in China because it is "not in a position to completely absorb the tariff increases” after China slapped a 40 percent tariff on U.S. car imports. 

The move by BMW comes directly in response to tariffs imposed on Chinese goods by the U.S. President Donald Trump.

Last week, Trump slapped China with steep tariffs on about $34 billion worth of products and was hit with retaliatory tariffs by China on American imports, including SUVs, soybeans and seafood.

Impacted by the tariffs, BMW, which is the largest U.S. auto exporter, announced its decision, but a spokesperson for the auto giant sought to clarify that "production levels at BMW Plant Spartanburg are not affected."

The company produces the brand’s X3, X4, X5 and X6 SUV models and their variants at a plant in Spartanburg, South Carolina where it employs 10,000 people.