President Trump recently signaled he was fine with Chinese automakers setting up shop in the US. But there are still a lot of hurdles to clear.
President Trump recently signaled he was fine with Chinese automakers setting up shop in the US. But there are still a lot of hurdles to clear.
is transportation editor with 10+ years of experience who covers EVs, public transportation, and aviation. His work has appeared in The New York Daily News and City & State.
Is the North American blockade on Chinese EVs softening? Today, Canadian Prime Minister Mark Carney announced a deal with China to slash tariffs on electric vehicles in exchange for lowering duties on canola products. Canada will initially allow up to 49,000 Chinese EVs at a 6.1 percent tariff, Carney said, though the exact timeline was unclear.
The news comes a few days after President Donald Trump signaled a willingness to allow Chinese EVs in the US, despite his administration’s ongoing trade war with China and long-standing concerns about the potential impact on domestic automakers in the US. At an event in Detroit, Trump said Chinese automakers would be welcome so long as they build factories in the US and hire American workers.
China is the world’s largest car market, and Chinese automakers sell more electric vehicles than practically every other nation combined. The country is particularly famous for cracking the code on extremely cheap EVs — the type that have eluded competitors in other nations. China makes so many EVs that the country’s automakers are locked in a heated price war and have been increasingly exporting their vehicles to other nations to whittle down their bloated inventories.
Canada wouldn’t be the first North American country to allow Chinese auto imports. Mexico has been importing Chinese vehicles for a few years now, including brands like BYD, Chery, and Neta. BYD has been considering building its own factory in Mexico, though those plans appear to be on hold.
But now with Canada opening the door to Chinese automakers, the question is whether BYD, Geely, and other Chinese companies could soon arrive in the US. The US auto industry is deeply intertwined with Canada and Mexico, though Trump’s tariffs have soured relations with the US’s northern and southern neighbors. Around 5.3 million vehicles are built in Canada and Mexico, 70 percent of which are destined for the US.
China still faces enormous hurdles before it can break into the US market, including extremely high tariffs and a complete ban on auto software from China. Experts predict that Chinese cars, and especially EVs, would be enormously disruptive if allowed in the country. Tesla CEO Elon Musk said China’s auto sector would “demolish” US automakers, and Ford CEO Jim Farley basically admitted the same thing.
China certainly senses an impending opportunity. Chinese automakers have been on a media blitz with US-based influencers, showcasing their high-tech, impeccably designed EVs in an effort to give Americans a sense of what they’ve been missing. The influencers clearly love these cars — will policymakers follow?