This week, China faced a significant economic setback as the European Commission decided to impose tariffs of up to 45 percent on its electric cars. Similarly, the U.S. announced tariffs of up to 100 percent last May, and Canada is set to implement a 100 percent tax.
In contrast, Mexico, a trade partner of both the U.S. and Canada, is moving in the opposite direction by offering China substantial benefits, including fiscal incentives, land, management, and preferential pricing breaks.
China’s subsidized vehicle industry has become a serious threat, extending beyond the usual violations of fair trade or intellectual property theft. It has now become a matter of national security. The U.S. Department of Commerce has highlighted that the Vehicle Connectivity System and the integrated software of Automated Driving Software are capable of transmitting, receiving, and collecting sensitive information, as well as remotely controlling cars for potentially destructive purposes.
Concerns over Chinese cars do not end there. U.S. congressmen have sent a revealing letter to Mexican President Claudia Sheinbaum, urging her to address this national security threat. The letter states, “We ask that you quickly turn your attention to a new and growing issue: the national security risks to both our nations from the widespread presence of ‘connected’ vehicles built by companies with deep ties to the Chinese Communist Party.”
U.S. legislators pointed out that Chinese automakers have significantly increased their presence in the Mexican market, more than tripling their share since the start of this decade. The data from these vehicles will be accessible to the Chinese Communist Party.
In 2023, the U.S.’s main commercial partner decided to welcome China with open arms, resulting in $4.6 billion in car purchases subsidized by the communist regime, surpassing the $4.4 billion spent on American cars.
“Cars today have cameras, microphones, GPS tracking, and other technologies connected to the internet,” said U.S. Secretary of Commerce Gina Raimondo. “It doesn’t take much imagination to understand how a foreign adversary with access to this information could pose a serious risk to both our national security and the privacy of U.S. citizens. To address these national security concerns, the Commerce Department is taking targeted, proactive steps to keep Chinese and Russian-manufactured technologies off American roads.”
In recent years, China has also used Mexico and other countries as gateways to flood the U.S. market with low-quality, low-priced products. Now, they are attempting to use the same strategy with cars.
China has become a world leader in vehicle exporting through the exploitation of workers, unfair trade practices, multi-million-dollar subsidies, and intellectual property theft.
The new Mexican government faces a significant challenge. Beyond issues of corruption, murders, drug trafficking, and the establishment of an authoritarian regime, it must also reevaluate its risky business dealings with China.
The global context has heightened concerns about China. For years, the Asian dragon engaged in shady business across the hemisphere. Not anymore. China’s trade and investments now have strong geopolitical and military components.
The U.S. and European countries have taken steps to address the commercial and national security threats posed by China’s automotive industry, but much remains to be done.
One thing is clear: Mexico, the main U.S. trading partner, cannot continue positioning itself as the Trojan horse of the Chinese empire. The risks are too high, and the benefits too low.
Source: The Hill
