Could Trump Throw US Automakers Under The Chinese Electric Car Bus?*
XPENG G9L with Paul George. Image credit: XPENG.
September 14, 20263 minutes
Z. S.
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We all know that one of Donald Trump’s favorite things to do is complain about China and put tariffs — or threaten to put tariffs — on Chinese produced goods. Indeed, we’re all paying a lot more for products in the United States because of the vast, high tariffs Trump slapped on almost everything.
Electric cars from China are all but banned in the US, with 100% tariffs on them. However, while that is protecting US automakers for the time being and allowing legacy automakers to sell a lot more gas-powered cars, perhaps Trump is allowing US automakers to be outcompete, beat, and embarrassed here at home just as long as that doesn’t involve importing cars.
Reportedly, Trump has just said that his administration wouldn’t block Chinese automakers from building cars in the United States. If these automakers want to set up a factory in Tennessee or Alabama or something, pay crappy wages, and produce compelling electric vehicles that threaten the traditional auto industry, that’s fine. Some in the US auto industry are loudly warning about the threat of this, but apparently Trump doesn’t care.
Or perhaps he doesn’t understand that Chinese electric vehicles could really threaten US automakers, because he doesn’t understand how good and competitive they have become.
That said … there’s not the EV supply chain here in the US for these vehicles. The thing China has is not one thing, it’s the whole industrial ecosystem that allows these EVs to be so cheap and competitive. They can’t just ship all the parts cheaply across the world and assemble the cars in the US South.
I don’t see any Chinese automakers clamoring to build their cars in the US. They’ve got China, other markets of Asia, Europe, Australia, South America, and even Africa where they can ship or build millions of electric cars a year and find buyers. The US market is one of the worst in the world for EVs, and government policy is constantly changing, practically schizophrenic, and often combative against both EVs and Chinese companies. So, even if Trump is fine with Chinese automakers building cars here, it’s hard to see it happening. That said, if they did, even with higher costs, I do believe they could really transform the US auto market.
What we really need, though, is someone back in office who’s going to support the US EV industry again. While the world is quickly moving forward in vehicle electrification, the US has become a laggard that is often going backwards!
*Okay, maybe that’s not the best metaphor for this, but I thought it was funny.
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