The exterior of a BYD electric vehicle showroom, operated by Schiller Auto, in Budapest, Hungary, on May 27, 2024.<\/p>\n
Bloomberg | Bloomberg | Getty Images<\/p>\n
As President Donald Trump<\/a> meets Chinese President Xi Jinping<\/a> this week, lawmakers in both parties are warning the White House not to use the U.S. auto market<\/a> as a bargaining chip in any deal with Beijing<\/a>.<\/p>\n The warning stems in part from Trump’s January suggestion that he could welcome Chinese automakers<\/a> if they built vehicles in the U.S. with American workers \u2014 remarks that were later walked back but still rattled auto-state lawmakers, unions and industry groups. Trump in January in an appearance at the Detroit Economic Club said he would happily welcome Chinese automakers to manufacture in the U.S.<\/p>\n “While the Administration is always seeking more investment into America’s industrial resurgence, any notion that we would ever compromise our national security is baseless and false,” White House spokesperson Kush Desai said in an email.<\/p>\n For lawmakers in auto-heavy battleground states<\/a> like Michigan<\/a> and Ohio<\/a>, even a limited opening for China could be politically explosive. They warn that if heavily subsidized Chinese automakers<\/a> gain a foothold in the U.S. market, it could threaten domestic manufacturing jobs in states central to the 2026 midterm<\/a> elections and the next presidential race.<\/p>\n “If your state is in the Rust Belt, letting Chinese automakers into the U.S. market would be detrimental and politically bad for many people,” said Stephen Ezell, a vice president at the Information Technology and Innovation Foundation, a Washington think tank focused on industrial competitiveness that has studied Chinese automakers. “You’re talking about risks to industry, jobs, factories and whole communities.”<\/p>\n So far, Democrats<\/a> have pitched the fight over Chinese autos as critical to protecting union jobs<\/a> and domestic production, while Republicans<\/a> are casting it as part of a broader economic nationalism push to counter Beijing and protect critical industries.<\/p>\n Major Chinese automakers such as BYD, Zhejiang Geely Holding Group<\/a> and SAIC Motor, don’t have a retail presence in the U.S., where they face 100% tariffs and other national security-related barriers.<\/p>\n But walling off the U.S. market is complicated by China’s existing footprint in the U.S. auto supply chain<\/a>. <\/p>\n More than 60 U.S.-based auto suppliers are owned by companies in China, according to global consulting firm AlixPartners<\/a>. That includes makers of axles, airbags, windshields and steering systems. Chinese companies also hold stakes in about 5% of roughly 10,000 U.S. auto suppliers, according to AlixPartners.<\/p>\n The links extend into some of the best-known vehicles sold in the U.S., as tracked by the National Highway Traffic Safety Administration.<\/p>\n Toyota’s<\/a> newest Prius plug-in hybrid contains about 15% Chinese parts. Ford’s<\/a> latest Mustang GT uses six-speed manual transmissions<\/a> sourced from China. General Motors<\/a>, despite backing hawkish trade policies, has reported that several Chevrolet models<\/a> \u2014 including the electric Blazer and the electric Equinox \u2014 contain roughly 20% Chinese parts.<\/p>\n GM has set a 2027 deadline for some suppliers to dissolve their China sourcing ties<\/a> over geopolitical issues, Reuters first reported in November. <\/p>\n Ford, Toyota and GM did not respond to requests for comment. <\/p>\n Rep. John Moolenaar, R-Mich., chair of the House Select Committee on the Chinese Communist Party, speaks at the 2025 CNBC CFO Council Summit in Washington, Dec. 3, 2025.<\/p>\n Aaron Clamage | CNBC<\/p>\n The rising political backlash has already translated into legislative action. Reps. John Moolenaar<\/a>, R-Mich., and Debbie Dingell<\/a>, D-Mich., introduced a bill this week<\/a> that would lock in restrictions on Chinese-made connected vehicles<\/a>, software and hardware over national security and data concerns. It mirrors Senate legislation from Sens. Elissa Slotkin<\/a>, D-Mich., and Bernie Moreno<\/a>, R-Ohio.<\/p>\n Connected vehicles have internet access<\/a> and wireless connectivity with other cars or trucks, technology that supporters say can enhance roadway safety.<\/p>\n “Every vehicle on American roads is a rolling data collection device,” Moolenaar said Tuesday when announcing the bill, warning that Chinese vehicles and components could capture information on “location, movement, people and infrastructure in real time.”<\/p>\n The hard line against Chinese vehicles comes as U.S. consumers are struggling with a sharp affordability crunch.<\/p>\n The average new car price<\/a> in the U.S. was $49,461 in April, according to Kelley Blue Book<\/a>. In China, consumers can choose from more than 200 battery-powered models<\/a>, including hybrids, priced below the equivalent of $25,000, according to DCar, a Chinese automotive content and car-shopping platform.<\/p>\n “The reality is we are behind Chinese autos in America, but we hope automakers can respond through innovation,” Ezell told CNBC. “Ultimately we need to compete through innovation if the industry is going to thrive domestically.”<\/p>\n Chinese brands have already used their scale and lower prices<\/a> to capture about 20% of the market in Mexico<\/a>, according to Mexico’s national statistics agency INEGI<\/a> and industry groups, and have made deep inroads<\/a> across Europe<\/a>, raising fears in Washington and Detroit that the same playbook could work in the U.S.<\/p>\n But China hawks argue cheaper cars could carry long-term costs. They warn the auto industry could mirror solar panels<\/a>, where Chinese companies used low prices<\/a>, state support and scale to dominate global supply chains, pushing out higher-cost competitors before gaining greater control over the market.<\/p>\n “China has a pattern of coming in, subsidizing the cost to keep the price lower, destroy an industry and then jack up the price,” Dingell said. “This is about America’s future. This is about the American workers’ future.”<\/p>\n