After the US election New hurdles for China's carmakers in the US

Related Vendors

Asia Waypoint

FAULHABER Drive Systems

Wuxi InfiMotion Technology Co., Ltd.

Following Donald Trump's election victory, Chinese carmakers and suppliers may face several new challenges, particularly with his announced intention to increase tariffs. However, Beijing maintains an optimistic long-term perspective, believing that such protectionist measures could ultimately benefit China's automotive industry by accelerating innovation and expanding its presence in emerging markets. 

China's automotive industry anticipates a further escalation in the trade war with the United States following Donald Trump's election victory. Should Trump act on his campaign promises, new obstacles may emerge for Chinese carmakers and suppliers. However, some in Beijing believe that in the long run, U.S. protectionism could ultimately benefit Chinese manufacturers by encouraging domestic growth and innovation. 

During his campaign, Trump addressed the Detroit Economic Club in the historically influential car city, Detroit, declaring that Chinese automotive imports would face tariffs as high as 100% or even 200%. According to South China Morning Post, Trump emphasized that these measures were designed to protect what remains of the U.S. auto industry, signaling aggressive trade policies targeting Chinese manufacturers. 

Trump also specifically targeted Chinese car exports from Mexico, hinting at punitive tariffs on such products. Companies like BYD, a major Chinese automaker, had been considering building factories in Mexico to bypass direct U.S. trade barriers. However, during the uncertainty of the election campaign, BYD and others put their "location scouting" efforts on hold.

Renegotiating the USMCA Free Trade Agreement

The potential loophole allowing Chinese exports to bypass U.S. tariffs via Mexico seems unlikely to remain open during Donald Trump’s second term, which begins on January 21. Trump has pledged to renegotiate the trilateral U.S.-Mexico-Canada Agreement (USMCA), specifically targeting imports from China. The detailed nature of his campaign rhetoric on this matter suggests it was more than mere electioneering. 

Under the Biden administration, 100% tariffs on direct imports of Chinese electric vehicles (EVs) were introduced, coming into effect about a month ago. This means the immediate impact of "Trump 2.0" policies on China’s auto industry might be limited since these tariffs are already in place. However, it is widely anticipated that Trump will not roll back these measures. The tariffs, originally aimed at bolstering the Democrats’ election strategy, have not yielded significant political advantages, nor are they expected to be a priority for repeal under Trump's administration.

Car Exports

The Top Import Countries for Chinese Cars

Tariff of 100, 200 or “1,000” percent

Trump has made it clear that he intends to seal off the US market from Chinese cars. As far as direct imports are concerned, he has spoken of tariffs of 100, 200 or even “1,000 percent” that should apply in the future. He considers the word “tariff” to be “the greatest word in the dictionary”.

hinese automakers exported 61,000 vehicles to the U.S. in the first eight months of this year, compared to 180,000 units sent to Belgium during the same period. This highlights the relatively low direct impact of Trump’s election victory on China's OEMs. The Chinese automotive portal Gasgoo commented that the immediate effect of this political development on Chinese original equipment manufacturers (OEMs) would be minimal. 

Challenges for Chinese Suppliers

The situation appears more troubling for Chinese automotive suppliers. During the same timeframe, they exported vehicle parts and components worth $12 billion (approximately €11.3 billion) to the U.S. Trump, during his campaign, proposed a potential new 10% tariff on all imported goods, with a particularly steep 60% tariff on goods originating from China. Such measures, if enacted, could severely affect Chinese suppliers who rely heavily on the U.S. market for their exports.

Another front against China's automotive industry, already opened under Biden's administration by China hawks in the U.S. government, is likely to intensify under Trump from Beijing's perspective: the argument of "national security" to keep connected Chinese cars out of the U.S. market. This industry in China is still in its infancy. Last year, fewer than 400,000 so-called ICVs (intelligent, connected vehicles) were sold in the country. However, the Chinese government has ambitious plans for autonomous driving, and this segment is expected to become increasingly significant in the coming years.

Dwindling Access to Chinese Research

Given China's current economic slowdown, the new hurdles for automotive exports are far from welcome. However, many observers in China believe that U.S. protectionism could benefit the Chinese automotive industry in the long run.

 One key reason is that such barriers will push China to intensify its efforts to independently develop advanced automotive technologies. These include better car chips, software for autonomous driving, and intelligent electric vehicles. This focus is seen as a credible response, extending beyond reactions to the U.S. election.

 Across more than 100 science and technology parks in China, innovative ideas shaping the future of mobility are being tested and implemented. Examples include AI-driven semiconductors and new materials for electric vehicle batteries. As the U.S.—and Europe—implement tariffs or other trade barriers against China, they risk losing access to this vibrant ecosystem of innovation and the advancements it fosters.

Emerging Markets in Southeast Asia and the Middle East

Additionally, under Trump, the U.S. is likely to retreat further and build artificial barriers around its domestic auto industry. By doing so, it leaves new growth markets in Southeast Asia and the Middle East open to China, several seasoned analysts concurred following Trump's victory.

 Regarding the Chinese government’s stance, it remained composed in its initial official statements. "China’s policy towards the U.S. remains consistent," said Mao Ning, a spokesperson for the Ministry of Foreign Affairs in Beijing. It is based on the principles of "mutual respect, peaceful coexistence, and ‘win-win’ cooperation."

* Henrik Bork is Founder and General Manager of AsiaWaypoint, Beijing/PR China