Speaking at a town hall event in Flint, Michigan, former U.S. President Donald Trump vowed to impose a 200-percent tariff on automobiles imported from Chinese manufacturers in Mexico to make them “unsellable” in the United States.
Trump, however, incorrectly stated that Chinese automakers are currently building large manufacturing facilities in Mexico. At present, only one Chinese automaker, JAC Motors, produces vehicles in Mexico at a facility in Ciudad Sahagún, Hidalgo, in partnership with telecoms magnate Carlos Slim. The company focuses on assembling electric vehicles (EVs), light trucks and commercial vehicles for both domestic and export markets.
While Trump may have stretched the facts, he is correct in noting that the entry of Chinese automakers with competitively priced vehicles has significant implications for the entire North American market. Several Chinese companies have announced plans to establish major manufacturing operations in Mexico, with a clear focus on the U.S. market. Among them is MG Motor, which has seen its market share in Mexico grow substantially over the past three years.
Other Chinese brands are also gaining traction in Mexico, including BAIC, Chirey and Omoda, all part of Chery Holding, which has alliances with Jaguar, Land Rover, and Fiat.
China’s commitment to new technologies and innovative design helped it achieve global dominance in the automotive industry last year, surpassing Japan as the world’s largest auto exporter. EV sales drove much of this growth, accounting for 1.2 million units, a 77.6 percent increase over 2022.
According to the International Energy Agency, global EV sales are expected to rise to 16.6 million vehicles this year, up from 13.7 million in 2023, with China leading this surge.