Former US President Donald Trump has taken yet another shot across the bow of China’s car industry, vowing to impose a 100 per cent tariff on vehicles made in Mexico for Chinese companies if he’s reelected later this year.

    Last month, Chinese car giant BYD announced its desire to open a factory in Mexico, which would give it easier access to the US market, the world’s second largest.

    Mr Trump – who will contest the November election against incumbent President Joe Biden – has previously said he would impose a 50 per cent tariff on Mexican-built Chinese cars if he returned to power.

    However, Bloomberg reports Mr Trump doubled down on his earlier comments at a campaign rally over the weekend, while taking specific aim at Chinese President Xi Jinping.

    “Those big monster car manufacturing plants you [Mr Jinping] are building in Mexico right now and you think you are going to get that – not hire Americans and you’re going to sell the car to us, no,” Mr Trump said, as reported by Bloomberg

    “We are going to put a 100 per cent tariff on every car that comes across the lot.

    “You screw us and we’ll screw you. It’s very simple, very fair.”

    At present, there’s a 27.5 per cent tariff on Chinese-made vehicles entering the US. It’s understood BYD would need to have 75 per cent of content sourced from within North America to clear existing US tariff requirements. 

    It’s likely BYD’s Mexican-built cars would still miss out on the US’s electric vehicle (EV) US$7500 (A$11,440) federal tax incentives, which require cars to be produced in North America with at least 50 per cent of their materials coming from the region.

    However, the US Government last year proposed a rule which would prevent any EV with battery components sourced from a “foreign entity of concern” (FEOC) such as China from receiving the tax credit.

    The proposal also included a provision which would exclude cars made by companies which are owned by, controlled by, headquartered in, incorporated in or manufacturing in an FEOC from the incentives.

    Though there are no Chinese brands selling vehicles in the US, Geely-owned Swedish siblings Volvo and Polestar are both on the local market, while there are also vehicles from Buick and Lincoln which are made in China.

    While Mr Trump has placed a target on China’s car industry in a bid to protect US jobs, the United Auto Workers (UAW) threw its support behind President Biden who backed the union’s industrial action against Ford, General Motors and Stellantis (formerly Fiat Chrysler Automobiles) last year.

    Mr Trump has long been opposed to EVs, claiming in September last year that the US Government’s target for EV uptake would kill the local automotive industry and given China even more power.

    Jordan Mulach

    Born and raised in Canberra, Jordan has worked as a full-time automotive journalist since 2021, being one of the most-published automotive news writers in Australia before joining CarExpert in 2024.

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