U.S. manufacturers urge Trump to keep Chinese vehicles out
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U.S. manufacturers are pleading with the Trump administration not to allow the Chinese auto industry "to wheedle its way in" to the American market.
Why it matters: President Trump is visiting China at a time when sky-high gas prices and inflation concerns have reignited calls for allowing cheap Chinese vehicles into the U.S.
Driving the news: The Alliance for American Manufacturing on Wednesday asked members to exhort the White House and Congress not to allow Chinese vehicles onto American roads.
- "If Chinese automakers are allowed to ship their excess stock to the United States, our auto supply chain will collapse under the weight of these dumped vehicles," Scott Paul, president of AAM, said in an open letter.
State of play: Chinese automakers have long coveted access to the American market, but they've been largely blocked by trade barriers.
- The Biden administration imposed a 100% tariff on Chinese EV imports and moved to ban Chinese connected vehicle technology.
- Trump, however, has "sporadically" suggested that he'd be open to China building U.S. manufacturing plants, including for automobiles, Wall Street research firm Fundstrat has noted.
What they're saying: "While the Administration is always seeking more investment into America's industrial resurgence, any notion that we would ever compromise our national security is baseless and false," White House spokesperson Kush Desai said.
Zoom out: Outside the U.S., the Chinese auto industry continues to move deeper into Western markets.
- BYD, the world's leading EV maker, is reportedly in talks to take over certain Stellantis plants in Europe to bolster its production capacity there.
- And Stellantis is providing Chinese automaker Leapmotor with access to a plant in Spain where Bloomberg says they'll make an EV together.
Our thought bubble from Axios Future of Mobility author Joann Muller: Despite resistance, most industry experts agree it's only a matter of time before Chinese cars arrive.
- One potential scenario: The U.S. could require Chinese companies to partner with American automakers in the U.S., just as China did in the 1990s to bolster its own industry.
What we're watching: Whether Chinese automakers attempt to use production sites outside of China to export their first vehicles to the U.S.
- "Chinese EVs are now pouring into markets in Europe, Latin America, and Southeast Asia. Canada just announced a policy to open the door to Chinese EV imports, too," Dunne Insights analyst Michael Dunne wrote recently.
The bottom line: Chinese cars aren't on American roads yet. "But the industrial capacity is being built elsewhere, and if the U.S. opens the market, American automakers may find themselves hopelessly outclassed," Dunne wrote.
