Employees work on an electric vehicle production line during at the Jiangling Group Electric Vehicle factory in Nanchang, China.KEVIN KROLICKI/Reuters
U.S. President Donald Trump is blowing hot and cold on Chinese cars – creating yet another headache for American automakers.
The auto industry’s consternation over his vacillating views was palpable Thursday as Mr. Trump pulled out all the stops to greet China’s President Xi Jinping for talks at the White House. Days earlier, groups representing domestic and foreign vehicle manufacturers, suppliers and dealers came together to exhort Mr. Trump to prohibit Chinese automakers from assembling, importing or selling their cars in the United States.
“Allowing them to open a domestic facility would provide a foothold in the U.S. market at the expense of manufacturers operating here,” stated their letter, which was jointly signed by half a dozen groups, including the Alliance for Automotive Innovation, the American Automotive Policy Council and the National Automobile Dealers Association.
That collection of trade groups was advocating on behalf of various companies, including Detroit’s Big Three automakers – Ford, General Motors and Stellantis –and foreign manufacturers, like Toyota, Volkswagen and Hyundai, that build cars in the U.S.
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They have good reason to worry. Earlier this month, Mr. Trump triggered an uproar by saying he would be open to Chinese manufacturers making their cars in the U.S. – a seismic shift that, if it comes to pass, would deal a blow to Canada, too.
“If China wanted to come in, and open a plant to build their cars here, I’d be okay with it. Japan does it – but they hire our people,” Mr. Trump said in an interview with Fox News.
“What I don’t want is them to build in Mexico and just, you know, build it inexpensively and ship it across the border,” Mr. Trump later added.
This, of course, is the same president who has previously claimed that Chinese vehicles represent both an economic and national security threat to the U.S. and has repeatedly vowed to unleash a “golden age” of American manufacturing.
Mr. Trump has instead created chaos for automakers by killing federal incentives for electric vehicles and waging trade wars, including with Canada and Mexico, that have driven up costs.
Although Mexico could be nearing a trade deal that would reduce tariffs on its autos, there is no such relief in sight for Canada. Instead, Mr. Trump is threatening to double Canadian auto tariffs from 25 per cent to 50 per cent on Jan. 1, 2027, and apply them to auto parts for the first time.
That brings us back to China, an adversary that is receiving a warmer welcome in Washington than many U.S. allies.
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If that wasn’t bonkers enough, American automakers appear legitimately worried that Mr. Trump could make them sacrificial lambs in his talks with Mr. Xi, which wrap up Friday.
Highlighting the stakes, GM CEO Mary Barra was reportedly on the guest list for Mr. Trump’s state dinner at the White House on Thursday, according to Reuters news agency.
Mr. Trump’s flip-flopping views on Chinese cars are baffling.
Washington maintains tariffs of more than 100 per cent on Chinese electric vehicles and a prohibition on the use of Chinese software that is capable of collecting user data.
In June, his administration banned electric vehicle maker Polestar, which is majority-owned by a Chinese company, from selling cars in the U.S. That same month, however, Washington cleared Volvo Cars, which is majority-owned by Chinese automaker Geely Holding, to continue selling vehicles with its “connected car” technology.
Then, on Sept. 3, U.S. Secretary of Transportation Sean Duffy sent a letter scolding Ford CEO James Farley for various decisions, including the company’s use of licensed technology from Chinese battery manufacturer CATL and its joint venture with Geely in Spain.
“Ford must demonstrate a level of corporate citizenship that prioritizes the long-term resilience and technological sovereignty of the United States automotive ecosystem over short-term arrangements or questionable foreign alliances,” reads the letter.
Huh?
Oh, and let’s not forget Washington’s turnabout on Ottawa’s agreement with Beijing to lower tariffs on Chinese electric vehicles and allow an annual cap on those imports.
Initially, Mr. Duffy said Canada would “surely regret” the deal. Months later, however, Mr. Trump was caught on a hot mic at the G7 Summit in France expressing his approval of Canada’s annual import cap of 49,000 Chinese electric vehicles.
Mr. Trump’s position on Chinese cars is as clear as mud, and his musings are an affront to the American auto industry.
If Detroit’s Big Three automakers are afraid of being thrown to the wolves, their Canadian workers should be terrified.