The influx of low-cost Chinese automaker imports from Mexico poses a significant threat to the American auto industry, warned the Alliance for American Manufacturing in a recent report. These vehicles, heavily subsidized by the Chinese government, could potentially cause irreparable harm to U.S. car companies if not addressed promptly.
To address this issue, the U.S. manufacturing trade group is calling on the Biden administration to take action to block Chinese auto imports from Mexico from benefiting under the U.S.-Mexico-Canada trade agreement. This move aims to prevent mass plant closures and job losses in the United States.
Of particular concern is the news that BYD, a Chinese electric vehicle manufacturer, plans to establish a factory in Mexico. With BYD surpassing Tesla as the world’s top EV maker in terms of sales, the implications for the American auto sector are significant. This development also comes in the wake of Tesla’s plans to build a factory in Mexico, further heightening concerns.
In response, a bipartisan group of U.S. lawmakers is urging the administration to increase tariffs on Chinese-made vehicles and explore strategies to prevent Chinese companies from using Mexico as a gateway to the U.S. market. The current 27.5% tariff on Chinese vehicles may need to be raised to address this growing issue.
John Bozzella, CEO of the Alliance for Automotive Innovation, has emphasized the importance of protecting the U.S. electric vehicle supply chain from Chinese influence. Proposed environmental regulations could inadvertently strengthen China’s position in the American automotive market, posing long-term risks to domestic industry.
In light of these developments, the U.S. Treasury has released guidelines for the $7,500 EV tax credit to steer the electric vehicle supply chain away from China. By taking decisive action to safeguard the American auto industry, the Biden administration can help ensure its resilience and competitiveness in the face of emerging challenges.
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