US should block cheap Chinese auto imports from Mexico, US makers say By Reuters

By David Shepardson

WASHINGTON (Reuters) -The U.S. authorities ought to block the import of low-cost Chinese language autos and elements from Mexico, a U.S. manufacturing advocacy group mentioned on Friday, warning they may threaten the viability of American automotive corporations.

“The introduction of low-cost Chinese language autos – that are so cheap as a result of they’re backed with the facility and funding of the Chinese language authorities – to the American market may find yourself being an extinction-level occasion for the U.S. auto sector,” the Alliance for American Manufacturing mentioned in a report.

The group argues the US ought to work to stop vehicles and elements manufactured in Mexico by corporations headquartered in China from benefiting from a North American free commerce settlement. “The business backdoor left open to Chinese language auto imports needs to be shut earlier than it causes mass plant closures and job losses in the US,” the report mentioned.

Automobiles and elements produced in Mexico can qualify for preferential remedy below the U.S.-Mexico-Canada commerce settlement in addition to qualifying for a $7,500 electrical car (EV) tax credit score, the report famous.

The Chinese language embassy in Washington mentioned in response that China’s vehicle exports “replicate the high-quality growth and powerful innovation of China’s manufacturing business… The leapfrog growth of China’s auto business has offered cost-effective merchandise with prime quality to the world.”

The problem has obtained new curiosity after information reviews that China’s BYD (SZ:) plans to arrange an EV manufacturing unit in Mexico. BYD, recognized for its cheaper fashions and a extra diverse lineup, lately overtook its greatest rival, Tesla (NASDAQ:), to change into the world’s high EV maker by gross sales.

Tesla introduced plans virtually a 12 months in the past to construct a manufacturing unit within the northern Mexican state of Nuevo Leon. In October, Mexico mentioned a Chinese language Tesla provider and a Chinese language know-how firm would make investments practically a billion {dollars} within the state.

A bipartisan group of U.S. lawmakers has urged the Biden administration to hike tariffs on Chinese language-made autos and examine methods to stop Chinese language corporations from exporting to the US from Mexico.

A gaggle of lawmakers urged U.S. Commerce Consultant Katherine Tai to spice up the 27.5% tariff on Chinese language autos and mentioned her workplace “should even be ready to handle the approaching wave of (Chinese language) autos that shall be exported from our different buying and selling companions, resembling Mexico, as (Chinese language) automakers look to strategically set up operations outdoors of (China).”

Alliance for Automotive Innovation CEO John Bozzella has mentioned that proposed U.S. environmental rules may let China acquire “a stronger foothold in America’s electrical car battery provide chain and finally our automotive market.”

The U.S. Treasury issued tips in December on the $7,500 EV tax credit score geared toward weaning the U.S. EV provide chain away from China.