U.S. politicians and the global auto industry have warned that allowing Chinese automakers to enter the U.S. market would be like opening "Pandora's box." (Reuters photo)
[Financial Channel/Comprehensive Report] U.S. President Trump and Chinese President Xi Jinping will hold talks this week. At the same time, U.S. politicians and the global auto industry are warning that allowing Chinese automakers to enter the U.S. market may be like opening "Pandora's box."
"CNBC" reported that earlier this month (September), Trump said that if Chinese automakers produced cars in the United States, he would "probably be OK" with allowing them to enter the U.S. market. The comments prompted a coalition of auto trade groups representing all parts of the U.S. auto industry to call on him to reconsider.
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It was a rare unanimous message from U.S. automakers, franchised dealers and suppliers. Subsequently, more than 20 Democratic lawmakers jointly sent a letter to Trump calling on him to maintain U.S. restrictions on Chinese automakers.
Michigan Democratic Senator Elissa Slotkin said that the focus now is not a partisan issue. It is about whether the industry wants to build cars in the United States and whether it wants a base that can adjust production at any time. If the United States wants this, they should not be allowed to enter this country.
According to reports, Trump plans to receive Xi Jinping and the Chinese delegation on Thursday (24th) and Friday (25th). Members of the delegation may include Wang Chuanfu, founder of BYD, a major Chinese electric vehicle manufacturer, and Zeng Yuqun, founder of CATL, the world's largest electric vehicle manufacturer.
Michael Dunne, a Chinese auto industry expert and former General Motors executive, said the possibility of the two senior executives attending the meeting highlights the importance of Xi Jinping's visit to the U.S. for the U.S. auto industry.
According to "Reuters", General Motors CEO Mary Barra will also attend the state dinner hosted by Trump for Xi Jinping, and several other U.S. business executives, including Tesla CEO Musk, will also attend. After the Department of Transportation publicly criticized Ford Motor's relationship with China, including its contract with CATL, the auto giant refused to say whether CEO Jim Farley would attend. Stellantis said that CEO Antonio Filosa is currently out of the country and will not attend the meeting.
Industry insiders and onlookers have expressed similar concerns as the U.S. Congress moves forward with bipartisan legislation aimed at banning Chinese automakers from entering the United States.
The pressure campaign comes as Chinese automakers are rapidly expanding into overseas markets, especially in Europe, Central and South America and other regions. Global automakers worry that heavily subsidized Chinese rivals like BYD and Geely could flood global markets, undercutting domestic production and vehicle prices.
Dunn said frankly that he did not think these concerns were exaggerated and that Chinese automakers would "quickly crush the U.S. auto industry, just like they are now impacting the European auto industry."
Data from market research and consulting company GlobalData shows that from 2020 to 2025, the global market share of Chinese brands will grow by nearly 70%. According to data from Germany-based Dataforce, Chinese automakers' market share in Europe was almost zero in 2020, but it reached about 12% in August.
Dunn pointed out that dozens of Chinese automakers are currently engaged in a "life-and-death price war" in the country, with losses everywhere. If they can enter the US market, which is by far the most profitable auto market in the world, it will be like getting a huge life-saving oxygen tank.
For much of this century, China was one of the world's largest and fastest-growing markets, with foreign automakers flocking to the country hoping to reap huge sales and profits. After years of efforts by manufacturers such as General Motors, China's automobile industry has rapidly transformed from a closed industry to the world's largest automobile export market.
Experts say that the driving force for China's economic growth comes from government subsidies to enterprises and the culture China has instilled in its workers. Due to the slowdown in the Chinese market and insufficient utilization of factory capacity, the government decided to strengthen exports.
Dunn said China's ambitions and way of doing business are very different from those of its U.S. allies, unlike those that allow imports from Japan, South Korea and other countries. As Xi Jinping has hinted many times, China's goal is to "make other countries more dependent on China and China less dependent on other countries." This is not a friendly gesture.
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