With Chinese cars closing in on America, Washington might use lessons from China’s own playbook to try to limit the threat to the U.S. domestic industry.
Why it matters: China used to copy American cars. Now, Chinese vehicles are as good or better than U.S. models, and cheaper, too.
- Automakers fear that low-cost Chinese models, already exported around the world, will soon take over American driveways as well.
Catch up quick: Chinese cars will soon be driving both north and south of America’s borders.
- Canada slashed tariffs on imported Chinese EVs last week as part of a broader trade deal, marking China’s official entrance there.
- Mexico just raised tariffs on Chinese cars to 50%, but it could be too late. They’ve already taken 20% of the market.
President Trump, reacting to the Canada deal, told reporters last week that he would welcome Chinese automakers to build factories in the U.S. too — as long as they hire American workers. “I love that,” he said. “Let China come in.”
Threat level: Not everyone is as enthusiastic about opening America’s car doors to China, however.
- “It would have potentially catastrophic impacts on our automotive industry, have ripple effects on our entire defense industrial base, and make every American less secure,” said Avery Ash, CEO of SAFE, a nonpartisan lobby group pushing policies that advance U.S. national and economic security.
- U.S. Sen. Bernie Moreno (R-Ohio), a former car dealer, put it more bluntly, per Reuters: “As long as I have air in my body, there will not be Chinese vehicles sold in the United States of America — period.”
Yes, but: Despite resistance, most industry experts agree it’s only a matter of time before Chinese cars arrive in America.
- At CES, an official with China’s Geely Group, owner of Volvo and Polestar, told Autoline Network: “The big question for us is when and where will we go to the USA. I think we’ll have an announcement on that in the next 24 to 36 months.”
Here’s how that might play out, per one longtime China auto expert:
- “To access the market, Chinese automakers will need to build in America, (with) terms taken directly from China’s own playbook” in the 1990s when global automakers entered China, Michael Dunne, CEO of Dunne Insights, tells Axios.
Zoom in: The U.S. could even require Chinese companies to partner with American carmakers as a condition for entering this market, as China’s government did back then, he says. (More on this below.)
- They’d have to build U.S. supply chains and meet specific tech transfer milestones over time.
- “Failure to do so would mean forfeiting their licenses to operate,” Dunne says.
“They’d take that deal in a heartbeat,” Dunne says, “because they’re desperate for (U.S.) market access.”
- Chinese carmakers are struggling at home because of overcapacity and a three-year price war. Exports have been keeping them alive, he says.
- “They look at the U.S. as oxygen,” Dunne says. “That’s our leverage in the U.S. You need oxygen? If you come here, it’s going to be very expensive.”
Read the full story: “Axios Future of Mobility, January 21, 2026.”
