This week the Chinese regime received a serious trade blow. The European Community decided to impose tariffs of up to 45% on its electric cars. Last May, the United States announced a similar measure with tariffs of up to 100%. In Mexico the opposite happens and red flag cars are already flooding the market.
Cars manufactured in China and subsidized by the Communist Party (CCP) have become a serious threat. It is not just a commercial or financial asterisk, but a matter of national security.
High risk technology. The Vehicle Connectivity System (VCS) and Integrated Automated Driving Software (ADS) are key. Its technology not only collects and transmits sensitive information, but can control cars remotely for destructive purposes.
The message to Mexico. The concern with Chinese cars doesn’t end there. United States congressmen and senators sent an urgent letter to President Claudia Sheinbaum warning of “the risks to the national security of both nations.”
The US legislators point out in their letter to Sheinbaum that Chinese cars have tripled their share in the Mexican market in the last decade and the data on that fleet of vehicles is available to the Communist Party.
Mexico and its business with China. In 2023, the United States’ main trading partner decided to open wide to China. Result, 4.6 billion dollars in the purchase of cars subsidized by the PCC. A figure less than the 4.4 billion American cars.
In recent years, China has also used Mexico as a gateway to flood the US market with low-quality, low-priced products. Now they are trying to use the same strategy with cars.
Illegal competition and labor exploitation. China has managed to become the world’s leading vehicle exporter through the blood, sweat and tears of exploited workers. Their dirty play includes million-dollar subsidies and the theft of intellectual property.
The new government of Mexico has a great challenge ahead. We are not just talking about corruption, murder, drug trafficking or the establishment of an authoritarian tyranny. No. Now it has to reassess its risky business dealings with China.
The context of global war has activated alerts in relation to China. For years the Asian dragon did dark business with the entire hemisphere. Not anymore. China’s trade and investments have a strong geopolitical and military component. The United States is clear about this serious threat.
The European Union and the United States have taken a first step towards a new line of commercial and national security action in the automotive industry. There is still much to do. One thing is clear, Mexico, the United States’ main trading partner, cannot continue to be the Trojan horse of the Chinese empire. The risk is very high and the danger is real.
