The ban that the Biden administration had imposed on smart cars from Beijing and surrounding areas (based on cybersecurity concerns), further strengthened by Donald Trump’s tariffs, must not be undermined. This is what the main American manufacturers and others say, fearing that China will “circumvent” American restrictions by setting up its own value chains on U.S. soil, just as it is doing in Europe.
CHINESE CARS PREPARE TO CIRCUMVENT THE TRADE WALL
A move actually encouraged by Western legislators themselves, since opening factories at least on paper should bring investment, know-how, and jobs, but evidently hindered by manufacturers who want to make the United States a “de-Chinafied” market, free from fierce Chinese competition.
THE FEAR THAT WHAT HAPPENED IN CHINA (AND EUROPE) WILL REPEAT
The Dragon’s brands, after all, not content with having unleashed a ruthless price war in China, which ended up overwhelming their own financials (see Byd’s accounts) and which will probably soon cause the disappearance of about a hundred manufacturers so far funded with public money, have exported it to Europe as well with consequences that risk being detrimental especially for local manufacturers, already battered by the crisis.
THE COMPLAINTS OF US MANUFACTURERS
American companies, equally battered by the disastrous electric vehicle bubble, currently need everything but fierce rivals with enough capital to start undercutting list prices. For this reason, they are taking a stand.
The Alliance for Automotive Innovation (which represents, among others, GM, Ford, Stellantis, but also Toyota and Volkswagen), the National Automobile Dealers Association, Autos Drive America, the American Automotive Policy Council, and MEMA, the suppliers’ association, have taken pen and paper to ask Trump not to allow them to open factories in the 50 states.
THE PRESIDENT WANTS SOMETHING ELSE ENTIRELY
A headache for the White House, which with tariffs aimed precisely at attracting Chinese production on American soil; not by chance, the American president at the Detroit Economic Club had indeed hoped for the entry of non-U.S. car brands into the market through the creation of value chains that would bring wealth and employment.
For U.S. brands and suppliers, however, Chinese automakers even producing in the U.S. would only trigger a race to the lowest price, a condition that American companies are currently unable to face.
CHINA’S RESPONSE
The Chinese embassy in Washington was furious and reiterated in a statement that the global success of cars speeding out of the Dragon is certainly not due to unfair competitive practices but to the technological competitiveness of onboard equipment and the high quality of the products.
Moreover, the embassy also recalls that China has always kept its market open to U.S. brands, which over the years have widely benefited from those revenues.
TOWARDS A U.S. TIKTOK FOR CARS?
The reconstruction is only partly true: until a few years ago, Beijing forced Western companies wanting to open factories in the country for low labor costs to open joint ventures with local counterparts (thus there was that transfer of know-how that is today the basis of the success of cars made in China).
The U.S. recently did the same (pushing, in truth, even further) with the Chinese ByteDance. A sort of TikTok model, in short, which could perhaps be replicated for the automotive world given American fears related to the use of data collected by Chinese cars. And precisely for this reason, local manufacturers are on alert.
