The US will seek to block Chinese electric cars manufactured in Mexico

He U.S. government would soon take decisive measures to exclude Chinese electric vehicles (EV) of its market, citing concerns about unfair competition, as well as risks related to the National security.

According to a detailed analysis of David A. Gantz, international trade and investment specialist at the Baker Institute for Public Policy, the administration that commands Joe Bidenas well as the Congress of that country, are considering a variety of legal mechanisms to avoid what some call an “extinction level event” for the American automotive industry.

He noted that the main threat comes from BYDhe Chinese EV giantwhich plans to build a assembly plant in Mexico with an initial production capacity of 150 thousand annual vehicles.

Although BYD claims that its production in Mexico will be intended only for local market and export to countries with free trade agreementsanalysts believe the real target is the lucrative US market of more than 15.5 million vehicles sold in 2023.

“The concern is that the low cost chinese vehicles and the auto parts from Mexico could threaten the viability of automotive companies in the US”, he warned.

From different spaces, both industry and unions have demanded that the government block these imports to avoid a “catastrophe” for the American automotive sector.

spy cars

But there's more at stake than just Economic interests. According to the report, the Biden administration has launched an investigation into the national security risks that raise the Chinese EVs “highly connected”, capable of collect and transmit sensitive data on infrastructure and activities carried out in the US.

“It's not just about cars, it's about mobility platforms that participate in a constant flow of communication, entertainment and data exchange,” said the analyst.

To address these threats, the US is considering a variety of legal and trade measures. One option is to initiate cases antidumping and anti-subsidies against the chinese vehicles, which would allow punitive tariffs to be imposed. A “safeguards” investigation is also being discussed to restrict imports that threaten to seriously harm the national industry.

However, Gantz assured that the quickest way would be to invoke the National security. Under an existing executive order, the president joe biden could prohibit import of chinese vehicles “connected” because they represent a risk to essential US security interests.

“This measure, although controversial, would be supported by the majority of Congress and would be difficult to legally challenge,” said the expert.

They warn of risks

Jorge Molina, consultant in public policies and international trade, declared that Mexico should be more careful in managing its foreign investment policybecause although the country is not doing anything bad against the T-MEC by allowing the companies to operate in Mexican territory chinese shipownersknows that it is an issue that has generated friction with the White House since the last six years.

“We would have to ask what the benefit would be for Mexico to allow a significant expansion of chinese investments in Mexican territory, when the US position since the Obama government is clear. Another argument in favor of Mexico having to get closer to Washington and lobby Congress, above all,” said Molina.

For its part, Adrián González, American customs agent and president of Global Alliance, pointed out that BYD could adopt a strategy used by other Chinese companies in Mexico: import most of the inputs from China and transform them substantially in Mexico.

In this sense, González highlighted that Mexico It is the second most important export market for chinese vehiclesso establishing a plant there would be strategic not only to overcome tariff barrierss, but also to reinforce their sales in the national market.