Normally, I am not an economic protectionist, but as America continues to grapple with attacks from multiple sides, safeguarding our industries should be a primary concern.
Mexico, one of the world’s largest automobile producers, exports 90 percent of its autos (mostly to the United States). While it is understandable that American automakers utilize the Mexican market for automobile manufacturing and assembling (even Tesla has indicated they may build a gigafactory in Mexico), the surge in Chinese auto manufacturing in Mexico is a troubling trend.
In recent years, Chinese manufacturers have established factories in Mexico, investing tens of billions in the country to exploit the U.S.-Mexico-Canada Trade Agreement. Currently, the tax incentives for electric vehicles favor American automobile manufacturers, but automobiles and components manufactured in Mexico are eligible for preferential treatment under the U.S.-Mexico-Canada trade agreement, so long as at least 50 percent of vehicle components are manufactured in North America.
Former President Donald Trump and his advisors understand the situation at hand. The ex-president has pledged 100 percent tariffs on Chinese electric vehicles built in Mexico if elected. In a speech last week, he mentioned a startling fact: “Over a period of 30 years, Mexico has taken away 34 percent of the automobile manufacturing business in the U.S.”
Why should we continue to allow this?
As of 2023, China became the world’s largest vehicle exporter, and true to form, China is strategizing to dump electric vehicle autos in the world’s most affluent market, much like previous issues with steel and electronics (and countless other products). If you recall, in 2018, U.S. Secretary of Commerce Wilbur Ross initiated antidumping and countervailing investigations on China to determine if steel and aluminum from China was being dumped in the United States. He later instituted punitive tariffs against Chinese aluminum and steel, citing national security threats.
Allowing China to sell heavily subsidized electric vehicles in the U.S. marketplace not only jeopardizes American automotive manufacturing but also imperils American security. Americans drive cars everywhere; nearly every city in America is built around highways, and it’s quite common for American families to own two or three cars. So, we must ask ourselves, do we really want Chinese automobiles undermining domestic competition while parked in our driveways, and potentially compromising our security?
I am certainly not an apologist for American automaker unions, but it is not a stretch of the imagination to claim that America has done very little to take care of Americans. Threats from abroad not only put auto manufacturing workers at risk but they also put the entire ecosystem around the automobile industrial complex at risk, ultimately affecting factory workers, auto mechanics, trucking companies, car salesmen, and auto financing.
It’s clear the U.S. government is focused on increasing the supply of electric vehicles on America’s highways, but officials need to be serious about supporting American-made electric vehicles and protecting manufacturing jobs. At the very least, imported electric vehicles should come from countries we have decent relationships with, not our enemies. We should also continue to support U.S. manufactured electric vehicles, instead of allowing imports to take market share. Tesla—with a $529 billion market value—has been instrumental in transforming the U.S. electric vehicle market. U.S. officials should see to it that Tesla becomes America’s next trillion-dollar company.
China has been attacking our republic for decades. Stopping China from destroying American industry and jobs, profiting off America’s market and spying on Americans should be our number-one goal. As we have found, time and time again, China will stop at nothing to achieve its goals. Why then does America permit an economic free-for-all for our foreign adversaries, when the solutions to our problems clearly lie within our own borders?
