Over the weekend, former president Donald Trump predicted a “bloodbath” for the U.S. auto industry if he loses the presidential election this November.

He addressed Chinese President Xi Jinping directly at a campaign rally in Ohio, vowing to double the tariff on Chinese cars that come into the U.S. if he is elected.

What You Need To Know

  • There are currently no Chinese-branded passenger vehicles for sale in the United States

  • Just five cars sold in the U.S. are made in China: the Lincoln Nautilus, Buick Envision, Volvo S90, Polestar 1 and Polestar 2

  • Chinese-made EVs account for 8.3% of the EV market in Europe

  • Chinese cars built in Mexico could be imported to the U.s. under the North American Free Trade Agreement

“We’re going to put a 100% tariff on every single car that comes across the line, and you’re not to going to be able to sell those cars if I get elected,” Trump said Saturday. “Those big monster car manufacturing plants you are building in Mexico right now and you think you are going to get that — not hire Americans and you’re going to sell the car to us? No.”

Spectrum News reached out to iSeeCars.com executive analyst Karl Brauer to explain the current status of Chinese car imports and their prospects for the future. Currently, there are no Chinese-branded cars for sale in the United States.

What cars on the market in the U.S. are made in China?

There are currently four models for sale in the United States that are made in China. The Lincoln Nautilus crossover is built at the Changan Hangzhou Assembly Plant. The Buick Envision crossover is also built in China through a joint venture with General Motors and the Chinese state-owned automaker SAIC.

Geely Holding Group, which purchased the Swedish automaker, Volvo, in 2010, makes the S90 sedans sold in the U.S. at its plant in Daqing. Geely also makes the Polestar 1 and Polestar 2 electric vehicles in Chengdu.

Who are the biggest players in the Chinese auto market?

SAIC, based in Shanghai, is China’s largest auto maker. State owned, it sold 5.02 million vehicles in 2023, according to the company’s web site. SAIC has joint ventures with several well-known car companies, including General Motors and Volkswagen.

FAW Group is the second largest state-owned car company in China. It makes about 3.5 million vehicles annually. Founded in 1953, it made the country’s first domestically produced passenger car in 1958. It also has foreign-branded joint ventures with Toyota and Volkswagen.

Dongfeng Motor is the third largest of the Big Four state-owned car companies. It sells about 3.3 million vehicles each year.  In addition to Dongfeng-branded vehicles, it has joint ventures with Honda, Nissan and Peugeot Citroen. In 2021, almost 80% of its car sales were with foreign-branded vehicles.

Changan Automobile is the fourth largest, and oldest, state-owned Chinese car maker. It manufacturers about 2.3 million vehicles annually. While many are sold under their own brand, Changan has foreign-branded joint ventures with Ford and Mazda, which make up the majority of its sales.

How could a Chinese company sell cars in the United States?

There are two major avenues that would enable Chinese car companies to sell vehicles in the U.S. They can set up a factories in Mexico that would enable them to sell vehicles through the North American Free Trade Agreement. But there’s a bigger obstacle.

“The biggest challenge that Chinese cars have to be sold in this country isn’t the price or tariffs,” Brauer said. “It’s a lack of a dealer network. There just aren’t any Chinese automakers that have a distribution channel in this country except for Volvo, Polestar and on some level Lincoln and Buick.”

That leaves Chinese auto makers with the difficult task of setting up a dealer network from scratch. More likely, a Chinese car company would partner with an established company that already has a dealer network in place.

Are Chinese-branded cars desirable with American consumers?

Chinese automakers will “absolutely” have an image and perception challenge with American consumers, Brauer said. “But a perception challenge is not going to be enough to hold off the Chinese automakers from starting to gobble up market share in the U.S. as they’re already doing in other markets like Europe.”

The reason is price. Most of the cars made and sold in China right now are priced at less than $20,000, including electric vehicles which can be bought for as little as $10,000. The lowest-priced cars currently sold in the United States are the Nissan Versa, starting at $16,390, and the Mitsubishi Mirage, starting at $16,695. Both run on gas. The lowest-priced EV for sale in the U.S. is the Nissan Leaf, starting at $29,255.

About 3% of the 9.2 million vehicles sold in Europe each year are from Chinese automakers. The percentage is significantly higher for Chinese EVs, which make up 8.4% of the European EV market, according to an independent auto analysis published last year.

About 30% of the cars China exports this year are expected to be electric vehicles, according to UBS.

“If Chinese car companies get all the supply chain and production processes in place to produce cars that get the $7,500 EV tax credit plus have a $20,000 or cheaper entry-level EV, they’re going to rapidly whittle away the current players in the U.S. auto market, both domestic and the other imports,” Brauer said.

Will Chinese companies that manufacture cars in Mexico be sold in the U.S.?

It remains to be seen.

“The United Auto Workers and the U.S. auto industry have enough political power that no matter who is in the oval office, there will be an effort to protect it,” Brauer said.

The Inflation Reduction Act of 2022 already has battery sourcing and manufacturing requirements in place to encourage domestic production of electric vehicles in particular.

“If Chinese companies start producing cars in Mexico, which is a free trade country, then the Chinese can sell cars into the United States that are assembled in Mexico and get the $7,500 federal tax credit and undercut U.S. cars,” Brauer said. “So there would potentially need to be another step put in place.”

When could Chinese cars be available in the U.S.?

The timing depends on what protections the U.S. puts in place over the next two years, Brauer said.