A U.S. manufacturing trade association called on the Biden administration to intervene in blocking the entry of affordable Chinese-made cars from Mexico, warning of potential threats to the American automotive industry’s sustainability.
Expressing concern over the consequences of introducing low-cost Chinese vehicles, the Alliance for American Manufacturing emphasized in a report that these imports, supported by substantial backing from the Chinese government, could pose an existential risk to the U.S. auto sector.
The group urged policymakers to address loopholes allowing Chinese automakers operating in Mexico to benefit from North American free trade agreements, stressing the need to safeguard against widespread factory closures and job losses in the United States.
Under existing trade agreements like the U.S.-Mexico-Canada Agreement and eligibility for electric vehicle tax credits, vehicles and components manufactured in Mexico could enjoy preferential treatment, further complicating the situation.
While the Chinese Embassy in Washington and the U.S. Trade Representative office refrained from immediate comments, the issue has garnered attention amid reports of Chinese electric vehicle manufacturer BYD’s plans to establish a factory in Mexico, elevating its stature as the world’s leading EV maker.
Notably, Tesla, too, unveiled intentions to construct a facility in Mexico, with investments from Chinese entities signaling strategic moves by Chinese companies beyond their domestic borders.
In response, a bipartisan coalition of lawmakers has called for measures to increase tariffs on Chinese-made vehicles and explore mechanisms to prevent Chinese firms from exporting vehicles to the U.S. via Mexico.
Highlighting potential vulnerabilities in the U.S. electric vehicle supply chain, industry figures like Alliance for Automotive Innovation CEO John Bozzella have emphasized the importance of proposed environmental regulations in countering China’s influence in the American automotive market.
Furthermore, the U.S. Treasury’s issuance of guidelines in December about the $7,500 EV tax credit underscores efforts aimed at reducing reliance on Chinese manufacturing within the U.S. electric vehicle sector.
Also read: Volkswagen Group Cars Barred from US Market Due to Chinese Component