And How Mexico is Opening a Catastrophic Backdoor
Washington, D.C. — China is exploiting Mexico’s trade relationship with the United States to decimate its competition in the global electric vehicle (EV) and internal combustion engine vehicle market, according to a new report released by the Alliance for American Manufacturing (AAM) today. The report uncovers the existential threat Beijing’s plans pose to the United States auto industry should the federal government fail to act now.
Alliance for American Manufacturing President Scott Paul said:
“China is unleashing a torrent of heavily subsidized cars upon the world, and America’s auto industry stands squarely in the path of devastation.
“Fulfilling a plan that’s been in the works for decades to dominate its competition in the global auto market, the Chinese Communist Party has weaponized massive state subsidies and the use of forced labor to enable Chinese companies to sell their goods at cutthroat rates around the world. All with the ultimate intent of annihilating auto manufacturers in America and elsewhere.
“Existing U.S. tariffs and trade action have staved off an extinction-level event for the U.S. auto industry, which is central both to our economic and national security. But China’s predatory trade practices know no bounds. Beijing is already utilizing Mexico as a backdoor for circumventing tariffs for imports to the United States and is following the same game plan that nearly destroyed the U.S. steel and solar industries. “America’s workers and manufacturers depend on policy leaders to defend them with the trade tools they need to compete on a level playing field and allow our nation’s auto industry and its supply base to flourish. This report offers a roadmap for how to do just that.”
AAM’s report urges the federal government to develop a more complete set of tools to identify, prevent and mitigate China’s trade cheating in the global auto market.
Policy recommendations include:
- Impose exclusionary tariffs on all Chinese automobile imports to the U.S.; enact the Leveling the Playing Field Act 2.0; reinstate Section 421; and improve the Steel Import Monitoring and Analysis System
- Fully enforce and tighten the United States-Mexico-Canada Agreement rules of origin for all automobile content in the 2026 joint review
- Comprehensively implement and enforce the Uyghur Forced Labor Prevention Act with additional emphasis on metals, automotive parts, and battery content and raw materials utilized in EVs
- Strictly enforce the Clean Vehicle Tax Credits authorized under the Inflation Reduction Act and other domestic content preferences for automobile content and related transit
Alliance for American Manufacturing President Scott Paul is available for interview.
Read AAM’s full report here.
###