Seeing the brilliant performance of Chinese auto companies in the past year, the American manufacturing alliance is anxious and has targeted normal trade exchanges between the United States and Mexico.

According to Reuters on February 24, 23, the Alliance for American Manufacturing (AAM) claimed that the US government should block the import of low-cost Chinese cars and parts from Mexico, and said that this could eventually lead to an "extinction event" for the US auto industry.

The group took aim at cars and parts made in Mexico by companies based in China, highlighting in its report that vehicles and parts made in Mexico are eligible for preferential treatment under the U.S.-Canada-Mexico trade agreement and are eligible for a $7,500 electric vehicle tax credit.

According to ABC News (ABC), data released by the US Department of Commerce on February 7 showed that in 2023, Mexico surpassed China for the first time in more than 20 years to become the largest source of US imports.

The administration is seeking to "wean itself off dependence on China," urging American companies to find suppliers in allied countries or bring manufacturing back to the United States. Since the signing of the free trade agreement between the United States, Mexico and Canada, Mexico seems to have become one of the main beneficiaries of the United States' "wean itself off dependence on China" strategy.

But ABC says the reality is more complicated than that, with some Chinese manufacturers already setting up factories in Mexico and benefiting from the trade deal's benefits.

At the same time, China exported 4.91 million vehicles last year, ranking first in the world for the first time. The United States "Fortune" magazine, Reuters reported on the 15th, at the automotive conference hosted by Wolf Research in New York on the same day, a number of chief executives of the auto industry giants said that major automakers in the United States and Europe are racking their brains to cut the cost of electric vehicle production in order to cope with the increasing competitive pressure from Chinese competitors.

To demonstrate the urgency of such action, Ford CEO Jim Farley noted that "25 percent of all vehicles sold in Mexico come from China." The world is changing."

Mexico by country comparison of vehicle sales chart from Bloomberg

A Chinese electric car operated by Vemo taxis is seen in Mexico City, capital of Mexico, on November 20, 2023 local time. Photo from Visual China

The Financial Times reported late last year that China's three biggest electric car makers were in talks to build plants in Mexico and that the US had "raised concerns" with Mexico. Mexican officials acknowledge they must be careful when considering Chinese investment, which risks upsetting its northern neighbor.

Ministry of Commerce spokesperson Shu Jueting said at the time that in recent years, many Chinese new energy vehicle companies have entered the Mexican market to carry out trade and investment cooperation and help local green development. The Mexican side has said many times that it welcomes more Chinese enterprises to invest and do business in Mexico.

"The practical cooperation between China and Mexico is a matter between two sovereign countries and a normal business activity carried out by enterprises of both sides based on international rules and market principles." No third party has the right to intervene, and we urge relevant countries to stop economic coercion." 'the spokesman said.

It is also a drag on the world's progress and prosperity.

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