Manufacturers' group says US should block cheap Chinese carmakers' imports from Mexico -February 23, 2024 9:03 pm

The trade group of American manufacturers on Friday urged the Biden administration to take action to block imports from Mexico by cheap Chinese automakers, which the group said would threaten the credibility of American automakers.

“The introduction of cheap Chinese cars — backed by Chinese government power and funding — in the U.S. market could ultimately be the death knell for the U.S. auto industry,” the Alliance for American said. Production in a report.

The group argues that the United States should try to prevent cars and parts made in Mexico by Chinese-headquartered companies from benefiting from the North American Free Trade Agreement. “The trade loophole open to Chinese auto imports must be closed before it leads to massive factory closings and job losses in the United States,” the report said.

Vehicles and parts produced in Mexico may qualify for preferential treatment under the U.S.-Mexico-Canada trade agreement, as well as a $7,500 tax credit for electric vehicles, the report said.

The Chinese embassy in Washington and the office of the US Trade Representative did not immediately comment.

The issue gained renewed interest after news broke that China's BYD plans to build an electric vehicle factory in Mexico. BYD, known for its cheaper models and more diverse offerings, recently overtook its biggest rival, Tesla, to become the world's largest EV maker by sales.

Tesla itself announced plans to build a factory in Mexico, in the northern state of Nuevo Leon, nearly a year ago. In October, Mexico said a Chinese supplier to Tesla and a Chinese technology company would invest nearly $1 billion in the state of Nuevo Leon.

A bipartisan group of US lawmakers has urged the Biden administration to increase tariffs on Chinese cars 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 the current 27.5% tariffs on Chinese vehicles, saying the USTR “must also be prepared for the coming wave of (Chinese) vehicles exported from our other trading partners, such as Mexico, because (Chinese) car manufacturers are strategically located outside (China).” They want to find out.”

John Bocella, CEO of the Alliance for Automotive Innovation, said the proposed U.S. environmental regulations could give China “a stronger foothold in the U.S. electric vehicle battery supply chain and ultimately in our auto market.”

The U.S. Treasury Department released guidance in December for a $7,500 EV tax credit to shift the U.S. electric vehicle supply chain away from China. (Reporting by David Shepherdson; Editing by Leslie Adler)