Donald Trump’s tariff explosions stir all over the world. It is believed that the wide tariff of Trump on the countries of the world will disrupt the supply chain and the global trade war can begin. Amidst all these movements, China’s car industry seems to be benefiting. Trump has imposed a 25% tariff on imported vehicles and auto parts in the US, which has come into force from Thursday. Analysts say that the tariff of Trump on the vehicles is going to benefit Chinese car manufacturers.
According to the US Government Agency Bureau of Economic Analysis, the US imported $ 475 billion auto parts, engines and vehicles last year from Japan, Mexico, South Korea, Germany and Canada.
Trump launched his first trade war in 2018 during his first term and put tariffs on $ 380 billion Chinese goods. Since this tariff, China’s presence in the American auto industry has been limited.
According to the automotive market research firm Jato Dynamics, all the light vehicles (car, vans and motorcycles) were sold in the US in 2024, in which the Chinese vehicles had just 0.4 percent.
Due to the limited presence of Chinese vehicles in the US market, Chinese brands are less liked. Last year, the then President Joe Biden imposed a 100 percent tariff on Chinese vehicles, due to this, Chinese vehicles are less visible in the US markets.
China’s car manufacturer will benefit from Trump’s tariff
Sam Fioreni, vice -president of the US -based Autoforest Solution, said Trump’s new tariff will currently be less affected by the Chinese car manufacturer. This is going to benefit Chinese car manufacturers far -reaching.
Talking to Aljajira, Fiureni said, ‘European, Japanese and South Korean car brands will now become quite expensive in the US market, so Chinese brands now have weak competitors. Business in America will now become expensive, due to which every company making the vehicle is going to suffer losses. But the companies making China’s car will not suffer much damage because their vehicles are not much there. Chinese companies are not dependent on the US for revenue.
According to experts, even though the reach of China’s electric vehicles is closed in the US market, Trump’s tariff will benefit China’s electric vehicles.
China is ahead in the manufacture of both electric and battery vehicles and last year its large electric car company BYD also left behind Elon Musk’s Tesla in revenue. Byd’s electric vehicles were sold in large quantities inside China. China ranks sixth among the world’s top electric battery manufacturers.
Trump’s tariff will have little impact on Musk’s Tesla as it imports a completely limited amount of foreign parts. Experts say the tariff will damage the Chinese company BYD competitors such as Hyundai of South Korea, BMW of Nissan of Japan and BMW of Germany and Mercedes, which will benefit the Chinese electric company on its own.
‘Trump’s tariff will cause huge damage to American auto industry’
Tu Le said Tu Le, founder and managing director of Sino Auto Insights, said that Trump’s policy of promoting tariffs and his domestic manufacturing may lead to the US brands competition which will eventually benefit China.
Tu Le said, ‘The truth is that if this is the condition of the American auto industry, then it will not be worth the industry competition in the coming four years. Instead of investing in clean energy or charging infrastructure, the US is focusing on bringing factories back to America.
However, Nick Marro, the chief economist for Asia at the Economist Intelligence Unit, says that even though Chinese car makers will not suffer much from tariffs, Chinese auto parts may have to bear more threats in the American market.
He says, ‘China -making companies do not sell much in America because they are charged high tariffs. But China’s auto parts manufacturers historically see America as a big market. If the problem arises from the tariff, then the supply chain will be affected, which will also affect America.