Block cheap Chinese car imports, US makers say

WASHINGTON:

The U.S. government should block imports of low-cost Chinese cars and parts from Mexico, a U.S. manufacturing advocacy group said Friday, warning they could threaten the viability of U.S. auto companies.

“The introduction of cheap Chinese cars — which are so cheap because they are backed by the power and funding of the Chinese government — into the U.S. market could end up being an extinction-level event for the U.S. auto sector,” said the Alliance for American Manufacturing reports in a report.

The group argues that the U.S. should work to prevent cars and parts made in Mexico by companies based in China from benefiting from a North American free trade agreement. “The trade backdoor left open to Chinese auto imports should be closed before it causes mass plant closings and job losses in the US,” the report said.

Vehicles and parts produced in Mexico can receive preferential treatment under the US-Mexico-Canada trade agreement, as well as qualify for a $7,500 electric vehicle (EV) tax credit, the report noted.

The Chinese embassy in Washington said in response that China’s auto exports “reflect the high-quality development and strong innovation of China’s manufacturing industry… The leapfrog development of China’s auto industry has provided affordable, high-quality products to the world.”

Reading US and EU protectionism against China’s auto industry harms its long-term growth: spokesman

The issue has attracted renewed interest following news reports that China’s BYD plans to set up an EV factory in Mexico. BYD, known for its cheapest models and most diverse lineup, recently overtook its biggest rival, Tesla, to become the world’s top electric vehicle maker by sales.

Tesla announced plans nearly a year ago to build a factory in the northern Mexican state of Nuevo Leon. In October, Mexico said a Chinese Tesla supplier and a Chinese technology company would invest nearly a billion dollars in the state.

A bipartisan group of US lawmakers has urged the Biden administration to raise tariffs on Chinese-made vehicles and explore ways to prevent Chinese companies from exporting to the US from Mexico.

A group of lawmakers urged U.S. Trade Representative Catherine Tay to increase tariffs of 27.5 percent on Chinese vehicles.

Published in The Express Tribune, February 25^u2024.

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