USA Pulls Mexico Into Its Anti-Chinese EVs Policies

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There’s no doubt about it: China saw that the future of the car market was electric and zoomed far into lead. It has accounted for more than half of global electric car sales, and aside from Tesla, the biggest electric car producers in the world are Chinese. Despite being late to the party — and many in the country still trying to prevent or slow adoption — the US is now trying to block Chinese electric cars from coming into the US and taking market share from established legacy automakers. There are currently very high tariffs on any Chinese EV imports (27.5%), and certain lawmakers are pushing for even higher tariffs!

I do see both arguments on this: 1) On the one hand, blocking good electric car options is not good for consumers, not good for the EV revolution, and not good for stopping climate change. If the US can’t be more competitive, that doesn’t mean it should penalize competitive electric car options from China. 2) On the other hand, if Chinese automakers are indeed unfairly subsidized by the Chinese government, then “dumping” them in the US and other markets is in violation of international trade rules and anti-free market.

Whatever your opinion on these matters is, the reality of the day is clear: the US is trying to block Chinese EVs. In Mexico, it’s been a different story. Like in South America, Africa, and other parts of Asia, Chinese EVs — most notably from BYD — have started entering the market. Also, BYD has been planning to open a factory in Mexico. First of all, this is a great way for the company to enter the market strongly and try to take a good chunk of a large auto market. Secondly, many have seen it as a way for BYD to potentially find a backdoor way into the US. But … not so fast.

Reuters is reporting that BYD executives met with Mexico government officials in January and are not being given access to do so again, while the government is refusing to provide standard incentives for a factory like cheap land or tax incentives. Reuters says this information is coming from “Mexico officials familiar with the matter.”

This is perhaps the most surprising side of all of this: about 20 different Chinese automaker sell cars in Mexico, accounting for about a third of the brand offerings in the country! Nonetheless, not a single Chinese automaker has a factory there.

According to the sources, Reuters says that Mexico is blocking Chinese EV production because of pressure from the US. The US is too concerned about Chinese EV production in the NAFTA free trade zone, where they’d be exempt from the aforementioned tariffs on Chinese EVs, and Mexico is conceding.

Is it fair? Are the concerns legit? Is blocking Chinese EVs truly a net positive for Americans and the world? It’s quite a complicated discussion.