US Trade Group: American Auto Industry Facing ‘Extinction Level Event’ as China Builds Plants in Mexico

A US manufacturing trade group wants to block the import of low-cost Chinese automotive imports from Mexico, calling it an existential threat to American automakers.

In a statement, Alliance for American Manufacturing President Scott Paul said, “China is unleashing a torrent of heavily subsidized cars upon the world, and America’s auto industry stands squarely in the path of devastation.”

While Mexico has surpassed China as the top US importer, that’s partly from Chinese manufacturing relocating there to avoid tariffs.

The “commercial backdoor,” as the trade group puts it, allows for preferential treatment under the US-Mexico-Canada trade agreement as well as a seventy five hundred dollar electric vehicle tax credit.

The alliance is asking the Biden administration to:

  • Impose exclusionary tariffs on all Chinese automotive imports
  • Enact the Leveling the Playing Field Act 2.0 to address country hopping for tariff avoidance
  • Reinstate import surge protection safeguards authorized during Beijing’s accession to the World Trade Organization.
  • Improve the Department of Commerce’s Steel Import and Monitoring Analysis System that collects and publishes early warning data of steel mill product imports
  • Prevent companies from non market-economies like China from gaining preferential treatment under existing trade agreements

The group also calls for stronger American-made incentives and procurement policies.

BYD, the world’s top selling electric vehicle automaker, is based in China and plans to build an electric vehicle factory in Mexico.

Industry Week’s Harry Moser notes that the value of auto parts produced by Chinese factories in Mexico and exported to the states jumped 15% in 2023, reaching over a billion dollars.