Trump Reveals Plan To Impose 100 Percent Tariffs On Chinese Cars Made In Mexico

Former President Donald Trump threatened to impose 100 percent tariffs on Chinese cars made in Mexico once reelected, double the 50 percent he stated earlier.

“Mexico has taken, over a period of thirty years, 34 percent of the automobile manufacturing business in our country,” President Trump said during a rally in Ohio on Saturday. China is building massive plants in Mexico where they plan on building the cars and selling them in the United States, paying no tax at the border, he said, adding that the plan will not work under his presidency.

“Let me tell you something to China, if you’re listening President Xi … those big monster car manufacturing plants that you’re building in Mexico right now, and you think you’re going to get that, you’re going to not hire Americans, and you’re going to sell the cars to us, no, we’re going to put a 100 percent tariff on every single car that comes across the line, and you’re not going to be able to sell those cars if I get elected,” he said.

In an interview with CNBC on March 11, President Trump said he would put a 50 percent tariff on all cars China builds in Mexico and sells in the United States. Such a move will force them to stop building the plants, he claimed. “But we don’t do that. We have stupid people running our government, to be honest,” he said.

Chinese Threat

A Feb. 20 report by the Alliance for American Manufacturing warned that China posed an “existential threat” to the American auto industry if it uses the Mexico route to sell vehicles. Manufacturing in Mexico will grant Chinese automakers “more favorable tariffs” under the United States-Mexico-Canada Agreement (USMCA).

This essentially hands over Chinese auto companies “backdoor access” to American consumers, allowing them to circumvent current U.S. policies that are keeping them away from the American market. “This is an auto industry backed by the Chinese state. It has invested heavily in foreign markets in order to access more of them,” the report stated.

“And there is cause for alarm that Chinese vehicles and parts will only increase their access to the U.S. market, overcoming existing tariffs and evading existing trade enforcement measures, to directly challenge domestic automakers and threaten the jobs of millions of American manufacturing workers.”

The report called on the United States to adopt a more “proactive and evolving” strategy to counter the Chinese agenda. It recommended that Washington raise tariffs on any Made in China vehicle and tighten USMCA regulations.

In January last year, a dispute panel of the USMCA ruled in favor of Canada and Mexico against the United States in their interpretation of rules for the production of automobiles.

The dispute was regarding the United States allegedly having a stricter interpretation of rules that a minimum of 75 percent regional parts is necessary for a car to be considered as made in North America. The rule is crucial to qualify for duty-free treatment under USMCA.

Canada and Mexico argued that if the core part of the vehicle, like the transmission or engine, has 75 percent regional content, then the number can be rounded up to 100 percent for calculating the overall regional content of the product. The United States disagreed against rounding up the numbers.

The panel sided with Canada and Mexico. The United States Trade Representative called the ruling “disappointing.” The panel’s interpretation “could result in less North American content in automobiles, less investment across the region, and fewer American jobs.”

Michael Stumo, from the Coalition for a Prosperous America, said that the judgment “is another reason to not outsource our trade policy, or any part of our sovereignty, to global tribunals. The USMCA was approved in large part because of strong regional auto content. Free traders on an international tribunal just changed that deal.”

Back in September, President Trump warned in a Truth Social post that the Biden administration’s EV program will end up benefiting China and the “Auto Industry in America will cease to exist!”

“Vote for TRUMP, and I will stop this Madness, IMMEDIATELY! Mexico & Canada LOVE Biden’s idiotic policy,” he said.