The Alliance for American Manufacturing is urging action to forestall “the introduction of cheap Chinese autos” into the U.S. market, which an AAM report states “could end up being an extinction-level event for the U.S. auto sector.”
The report argues that the U.S. auto sector and its extensive domestic supply chain face a growing threat from Chinese competitors backed by the central government. While direct U.S. imports of Chinese automobiles remain limited, due in part to substantial tariffs, Chinese manufacturers are beginning to build factories in other countries, including Mexico, to skirt those tariffs and access the U.S. market.
The report therefore calls on U.S. policymakers to immediately “adopt a proactive and evolving strategy” to head off this threat that includes the following measures.
- further increase import tariffs on vehicles made in China, either through existing Section 301 tariffs or via a new Section 301 investigation
- reinstate the Section 421 import surge protection safeguard against China’s automotive and related industries
- tighten and fully enforce the rules of origin in the U.S.-Mexico-Canada Agreement so Chinese vehicles “are not allowed to leak in”
- exclude components and vehicles made by companies headquartered in non-market economies like China from preferential treatment under U.S. free trade agreements and preference programs
- strictly enforce industrial policies (e.g., the clean vehicle tax credits in the Inflation Reduction Act) so that upstream content and raw materials from China do not benefit
- fully implement and enforce the Uyghur Forced Labor Prevention Act with additional emphasis on metals, automotive parts, and battery content and raw materials utilized in electric vehicles
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