As global scrutiny grows over China’s massive auto production glut, Beijing is turning to offshore manufacturing as a potential means of avoiding tariffs.
US Department of Commerce Proposal Ban on import of connected cars Integrating certain Chinese or Russian technologies could have a “significant impact on Mexico’s auto industry” and disrupt bilateral trade. Mexico refutes in comments It was submitted to the Department of Commerce this month. The challenge suggests Mexico’s intention to use China’s supply chain for vehicles exported to the United States under the United States-Mexico-Canada Agreement.
As you may recall, the White House announced We couldn’t agree more, with plans to impose the ban in September amid concerns that “connected car technology from China and Russia poses a particularly serious threat”.
in comment An Alliance of American Manufacturing (AAM) report submitted to the Department of Commerce on October 28 praises the Biden administration’s efforts to address the danger.
“Time is of the essence as there are worrying reports that large amounts of data collected from Chinese vehicles is being sent to Beijing. Launched in March, Project Lion found that approximately 90% of communications involve data ranging from simple voice commands to the vehicle to physical data about the vehicle. Anomalous activity was also revealed in the form of “a single, unencrypted file being continuously downloaded by the vehicle from the nio.com internet address.” ”
It’s worth noting that our southern neighbor is trying to neutralize a ban on a technology that poses such a clear national security risk, but what really caught our attention is this ban. How intertwined must Chinese parts and Mexican auto exports be for them to pose such a risk to national security? As Mexico itself admits, it is Mexico’s auto sector.
“Given that assembly is a major activity in our country, the automotive sector will face supply chain disruptions from China as auto parts and components are integrated into vehicles. This will impact the economic growth of the sector. Mexico claims that there is a possibility that comment It was submitted to the Department of Commerce this week. This confession makes it hard to believe that these cars are really Mexican exports.
In a similar vein, Mexico said the proposed ban “could lead to an increase in production costs due to changes in suppliers of automotive parts and components within the pre-planned supply chain of the automotive industry.” states. This is probably because Chinese manufacturers play a very large role in the automobile industry. Automobile production in Mexico. The involvement of major Chinese automakers in Mexico’s economy is certainly part of Beijing’s mission to avoid U.S. tariffs. european union,Canada.
We have documented China’s efforts to expand its manufacturing footprint in Mexico. our automatic report:
“Chinese automakers currently face significant barriers to entry into some Western markets, including the United States.The European Union will launch an investigation in 2023 into the large subsidies that underpin the competitiveness of Chinese auto exports. However, U.S. tariffs have succeeded in keeping these vehicles, electric or otherwise, off U.S. highways.
“But Chinese automakers aren’t cutting corners either. BYD, which will become the world’s largest EV maker in 2023, is building a factory in the heart of the European Union and preparing for production in Thailand. The company is one of six Chinese companies that have access to neighboring markets through regional trade agreements.
“More worrying, however, is the significant spending by Chinese companies on factories in Mexico, which allows them to enter the United States through more favorable tariffs under the United States-Mexico-Canada Agreement (USMCA). This strategy is effectively an effort to gain backdoor access to U.S. consumers by circumventing existing policies that keep Chinese cars out of the U.S. market.
This all sounds like “your” problem, Mexico.
of USMCA This system aims to provide preferential tariff treatment to goods traded between the three countries. These privileges should not be extended to products manufactured primarily in China, especially those that may be used to monitor sensitive areas of the United States.
The Department of Commerce must move forward with a proposed ban on China’s connected vehicle technology as soon as possible, given the magnitude of the potential risk and China’s demonstrated interest in exploiting vulnerabilities.
