Terrifying prospect

Trump-Xi summit raises a terrifying prospect for America and Europe: Chinese cars

The question is when, not if, U.S. and European auto markets will open up to Chinese EV investment.

By Zack Colman, Jordyn Dahl, Sara Schonhardt and Charlie Cooper

The walls that once kept Chinese electric vehicles out of the western economies are quickly developing some major cracks.

That’s made the U.S. auto industry and lawmakers nervous that President Donald Trump’s trip to Beijing for a Thursday summit with Chinese President Xi Jinping could accelerate the entry of cheap EVs, wiping out the nascent U.S. EV sector at a time when fuel costs are soaring because of the U.S. war against Iran and rising car prices are souring public sentiment.

“The only thing that terrifies me is BYD,” Rep. Don Beyer (D-Va.), whose family built a car dealership company before he entered Congress, said last week at an event in Washington. “The fact that it’s so inexpensive would destroy every other car company’s investment in electric vehicles.”

For now, the U.S. market is off limits to Chinese EVs due to a combination of national security regulations and a 100 percent tariff. A flurry of new legislation backed by the top auto lobbying organization and manufacturers along with bipartisan warnings from Congress to Trump to avoid deals are evidence that U.S. automakers are in a panic over the potential entry of Chinese EVs or manufacturing investment.

“They’re absolutely more than worried — they’re scared stiff,” said Michael Dunne, chief executive officer of Dunne Insights, an automotive consultancy. “Imagine if the Chinese come in with a $25,000 EV. That could catch like wildfire.”

While Cabinet officials insist protecting the auto sector is non-negotiable in the talks at this week’s summit, Trump himself has opened the door to Chinese investment.

“If they want to come in and build the plant and hire you and hire your friends and your neighbors, that’s great,” Trump told the Detroit Economic Club in January. “I love that. Let China come in, let Japan come in. They are and they’ll be building plants, but they’re using our labor.”

Lawmakers have focused on national security concerns to dissuade Americans from fantasizing about Chinese vehicles they can’t buy. They also have championed protecting the nation’s industrial core and the jobs they represent, pointing to European struggles to save auto jobs from Chinese competitors.

Michigan Reps. Debbie Dingell, a Democrat, and John Moolenaar, a Republican, co-sponsored legislation Monday to codify bans on Chinese models because of software and hardware that collect personal information like location data. Democratic Michigan Sen. Elissa Slotkin and Republican Ohio Sen. Bernie Moreno — who also made his fortune from car dealerships — introduced a version in the Senate, S. 2040, last month.

“I think we all understand the desire for a cheap car, just like I understand my nieces and nephews wanting to use TikTok and not caring that their data goes back to Beijing,” Slotkin said at a recent Washington event. “We have to care as leaders, even when people are laser-focused just on cost.”

Unpredictable Trump

Trump’s proclivity for splashy trade announcements and his previous stance on the Chinese car companies could set the stage for the U.S. to lower the barriers that have so far closed the country off to their EVs. For China, there is no bigger prize than accessing the U.S. market — a goal that could come into play in Trump’s long pursuit of an elusive trade deal with the world’s second-largest economy.

That backdrop has raised anxiety in the U.S. automotive sector that customers could be drawn to the cheaper Chinese vehicles, particularly as U.S. drivers contend with gasoline prices at four-year highs and Republicans’ repeal of buyers’ incentives last year.

Chinese EV-maker BYD markets its Seagull model at $7,800 in China, far less than the $29,000 Chevy Bolt, the cheapest EV available in the United States. Praise from mainstream news outlets like the Wall Street Journal has also helped dispel the perception that Chinese models are cheap knock-offs, and videos on TikTok are fanning the flames by appealing directly to American consumers.

The White House, in a statement, rejected the notion that it would allow any technology that would threaten U.S. national security.

“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 a statement.

Automakers speaking to POLITICO expressed fears that Chinese EV brands could pose an existential threat to their business and impose security risks on American consumers. Some experts also said the entry of Chinese firms could undercut U.S. efforts to grow its EV sector — as they did in Europe, where they quickly gobbled up market share.

But consumer interest remains significant despite those warnings. Thirty-eight percent of Americans would consider buying a Chinese vehicle if they were available, compared with 39 percent who would not, according to a February survey by Cox Automotive, Inc.

Making inroads in Europe and Canada

The U.S. firewall on Chinese EVs remains in place, however, as other countries are lowering theirs. Canada reversed protectionist trade measures earlier this year to embrace new Chinese EV imports — those first shipments landed this week. Under the terms Prime Minister Mark Carney agreed to, Canada will import enough Chinese cars to comprise 20 percent of its EV market.

Canada’s Industry Minister Mélanie Joly told POLITICO last week the joint ventures with Chinese EV companies could help boost Canadian manufacturing productivity.

In Europe, Chinese models grabbed their highest share ever late last year, putting German automakers on edge. Manufacturing investment has followed suit: On Friday, Dutch-based Stellantis announced a deal to produce electric vehicles with Chinese firm Leapmotor at two sites in Spain.

U.K. Prime Minister Keir Starmer’s Labour government has resisted tariffs, which enabled cheaper Chinese models to get a sizable foothold in the market. Chinese cars represented 4.9 percent of new car registrations in the U.K. in 2024, 9.7 percent in 2025 and 14.6 percent in the first four months of 2026, according to figures shared by the U.K. automobile industry group the Society of Motor Manufacturers and Traders.

The U.K. experience may be instructive for Trump. In a sign of the political ramifications of an open-door policy, the increasingly common sight of a BYD or Jaecoo (the U.K.’s best-selling car in March) on British streets has sparked a backlash among Trump-aligned, right-wing opposition to Starmer’s Labour Party.

Nigel Farage’s Reform U.K. party, currently topping opinion polls, has threatened to erect trade barriers to protect domestic manufacturing.

“British car makers currently don’t stand a chance against unfair Chinese competition,” Reform’s economy spokesperson Robert Jenrick said last month, raising the prospect of tariffs and quotas should his party win power.

A U.K. government spokesperson said the country was “open to global investment into the sector, including from China” and that ministers would “continue to engage closely with industry to ensure our approach reflects the sector’s and the U.K.’s national interests.” The spokesperson responded anonymously as per typical U.K. government procedure when asked for comment.

Automakers look for lessons abroad

U.S. automakers and their allies have warned of European automakers’ struggles to beat cut-rate Chinese pricing. They have claimed Chinese promises to invest in manufacturing are vaporware, arguing they would cut out U.S. suppliers to source from supply chains that rely on lower-cost foreign labor.

A U.S. auto executive who was granted anonymity to discuss private conversations said three senior administration officials insisted the auto sector would not be on the negotiating table for Trump’s visit. That the U.S. industry and its boosters have rallied their Washington allies for this week’s summit is an indication that they are anxious about any unscripted dialogue between Trump and Xi.

“I hope it isn’t on the agenda. But we are also doing everything we possibly can to keep it off the agenda,” said Scott Paul, president of the Alliance for American Manufacturing, a coalition of U.S.-based companies. “There’s a great deal of concern about this one.”

Paul’s organization’s 54,000 members have spent weeks urging their congressional representatives to amplify that message, aiming to snuff out even the whiff of a deal that would give Chinese automakers access to the U.S. market.

Chinese investment was a “Trojan horse” for the auto sector, which he said accounts for one in nine U.S. manufacturing jobs. Chinese automakers’ entry would kill the “green shoots” of the burgeoning U.S. EV fleet, such as Ford’s forthcoming midsize Ranchero EV pickup targeted for $30,000 and the reintroduction of the Chevy Bolt.

Few automakers and analysts see Trump reversing course to allow imports to the U.S., which they say would undermine his America First trade policy to bring manufacturing back to the country. And for now, some experts say the Chinese sector may be wary of stirring up opposition that undercuts its long-term growth.

“I don’t think Chinese automakers are going to take the risk, even if they have the opportunity,” said Jacob Gunter at MERICS, a German research organization focused on China, adding that European automakers reeling at home from Chinese competition can continue to have confidence the U.S. market will be ringfenced for the near future.

But one foreign auto executive said Trump’s penchant for dealmaking and splashy announcements was worrisome. Imports are not the biggest concern, the person said, rather, it’s the promise of investment in U.S. states that could bring jobs and, in Trump’s mind, votes. Such a deal would likely see financial markets ding Western companies because it would raise the prospects of future investment, even if it doesn’t materialize before Trump leaves office.

“It would be a worry. Where the Chinese go, legacy brands die,” said an executive at a second global automaker.

That approach underlies BYD’s broader strategy. Stella Li, the company’s executive vice president, told the audience at London’s International Energy Week the company wants to “localize our manufacturing capacity” in hopes that Europeans think of it as one of their own within three years.

U.S. manufacturers are also taking note. Ford has reportedly pitched European joint ventures with Geely, China’s second-leading EV producer — though it is unclear whether any such partnership would involve a U.S.-focused strategy.

Chinese automakers have set their sights on the U.S. BYD has invested in its own logistics with a fleet of eight container ships that can each carry up to 9,000 vehicles, making it easy to redirect exports to the U.S. as soon as the barriers crumble.

The Chinese industry’s overcapacity is largely due to ramping up of production to address the U.S. market, said Matthias Schmidt, a long-time car analyst in Europe. Meanwhile, a costly price war in China has undercut profits, following the EU move to slap duties on made-in-China electric vehicles in an effort to stop them from flooding the market.

Those dynamics are manifesting at a sensitive time in the U.S., where Trump faces worsening poll numbers in large part due to rising costs. The surge in production and availability of cheap, tech-savvy cars come at a time when Americans have less ability to afford new vehicles, making the Chinese an alluring option.

“The Chinese are very good at infiltrating, influencing and persuasion,” said Rachel McCleery, executive director of the Coalition for Reimagined Mobility at Securing America’s Future Energy, a nonprofit. “They’re doing what they do best when it comes to getting people on board with the product they have to offer that they don’t currently have market access to offer.”

For the allies of the U.S. carmakers, though, the message to Trump is simple: “Find something else to give on,” Slotkin said. “Don’t give away the farm just to make a deal.”