Trump is promising 100% tariffs on Chinese cars built in Mexico – electric or not

Former President Donald Trump has announced he would impose a 100% tariff on cars built in Mexico by Chinese companies for sale in the U.S. market – virtually double the tariffs he previously sought.

At a saturday Campaign speech In Dayton, Ohio, Trump said Mexico had taken 34% of the U.S.’s auto manufacturing business over 30 years

“China is now building a couple of huge factories that will build the cars in Mexico, and they think they will sell these cars to the United States without taxes at the border,” he said.

Trump then announced a message that appeared to be aimed directly at Chinese President Xi Jinping – and a detail that was reported Bloomberg– that he intends to impose a 100 percent tariff on all of these cars if elected.

Currently, cars imported from China are subject to a 25% tariff, while cars from Mexico made from Chinese parts are only subject to a 2.5% tariff.

2023 Buick Envista (China Spec)

“You won’t sell cars here,” Trump said, resuming the conversation a short time later. “And I tell them, if they want to build a plant in Michigan, Ohio or South Carolina, they can use American workers, they can’t send Chinese workers here, which they sometimes do… but they’re not going to build them in Mexico .”

What Trump is proposing is not entirely new and follows the urging of several factions in the Senate, the Democrats and the Republicans Higher tariffs on Chinese vehicles and faster action as the Biden administration explores the possibility. Earlier this month, three Senate Democrats from auto-producing states warned that “artificially priced Chinese electric vehicles are flooding the U.S. market,” which would “threaten the survival of the U.S. auto industry as a whole.” This came just days after Republican Josh Hawley introduced a bill that would effectively impose a 125% tariff on imported Chinese vehicles and a 100% tariff on Chinese vehicles manufactured in Mexico.

BMW Group plant San Luis Potosí in Mexico

Mexico does builds many electric vehicles that go to the USA but only buys a few of them. Among them, GM and Ford are already looking at assembling electric vehicles in Mexico, and BMW recently announced plans last year to build its next-generation New Class electric vehicles there.

Early in his term, Biden issued an executive order on electric vehicle supply chain and battery production and turned to the Defense Production Act to boost production of critical electric vehicle materials sooner. This led to the Inflation Reduction Act, a multi-faceted law that applied to the vehicle and manufacturing sectors will double U.S. electric vehicle sales by 2030 compared to previous forecasts, analysts said in October.

2024 Polestar 2 single engine

The tide has turned on Chinese vehicle imports compared to five or six years ago, when there seemed to be an unstoppable trend of U.S. and German automakers wanting to shift to more Chinese-made vehicles in the near future – especially given the focus China’s focus on electric vehicles. The Polestar 2 is the only widely available Chinese-made electric vehicle currently sold in the U.S. market; Polestar also appeared to hint last week that the Chinese-made Polestar 3 models will launch ahead of the US-made models this year.

In the tariff announcement, Trump actually made no distinction as to whether the affected vehicles were electric vehicles or not. Early in the speech, however, he again appeared to criticize Biden’s push toward electric vehicles, alliances with the UAW and electric vehicles in general. “They want to do this all-electric nonsense where the cars don’t go far, cost too much and are all made in China,” he said.

Chinese automaker BYD has not yet confirmed a plant in Mexico, but is looking for locations. BYD has said it has no plans to sell electric vehicles in the US

BYD Han

According to a recent report in Car weekBYD already offers four models in Mexico – the Han, the Tang, the Yuan Plus and the Dolphin Mini. The Dophin Mini starts at about $21,000 with a range of 190 miles or $23,000 with a range of 252 miles.