An exterior view of BYD’s electric vehicle showroom operated by Schiller Auto on Monday, May 27, 2024 in Budapest, Hungary. Chinese EV giant BYD plans to open its first European car factory in Hungary. Photographer: Akos Stiller/Bloomberg via Getty Images
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As President Donald Trump meets with Chinese President Xi Jinping this week, lawmakers from both parties are warning the White House against using the U.S. auto market as a bargaining chip in any deal with China.
The warning stems in part from President Trump’s suggestion in January that he might welcome Chinese automakers to use American workers to build cars in the United States. Although the statement was later retracted, it still upset state automakers, labor unions, and industry groups. President Trump appeared at the Detroit Economic Club in January and said he was happy to welcome Chinese automakers to produce in the United States.
The White House did not respond to requests for comment.
For lawmakers in auto battleground states like Michigan and Ohio, even limited leeway on China could have explosive political consequences. They warn that if heavily subsidized Chinese automakers gain a foothold in the U.S. market, it could threaten domestic manufacturing jobs in states that will be central to the 2026 midterm elections and the next presidential election.
“If your state is in the Rust Belt, letting a Chinese automaker into the U.S. market would be detrimental to a lot of people and would be bad politically,” said Stephen Ezell, deputy director of the Foundation for Information Technology and Innovation, a Washington think tank focused on industrial competitiveness that has studied Chinese automakers. “You’re talking about risks to industry, jobs, factories and entire communities.”
So far, Democrats have cast the fight over Chinese autos as essential to protecting union jobs and domestic production, while Republicans are pitching the fight as part of a broader push for economic nationalism to counter China and protect vital industries.
Major Chinese automakers such as BYD, Zhejiang Geely Holding Group and SAIC Motor Corp. do not have retail stores in the U.S. because they face 100% tariffs and other national security-related barriers.
But cutting off the U.S. market is complicated by China’s existing footprint in the U.S. auto supply chain.
More than 60 U.S.-based auto suppliers are owned by Chinese companies, according to global consulting firm AlixPartners. This includes manufacturers of axles, airbags, windshields, and steering systems. Chinese companies also own about 5% of about 10,000 U.S. auto suppliers, according to AlixPartners.
This link also extends to some of the most famous vehicles sold in the United States, as tracked by the National Highway Traffic Safety Administration.
Toyota’s The latest Prius plug-in hybrid contains about 15% Chinese-made parts. ford’s The latest Mustang GT uses a six-speed manual transmission made in China. general motorsreported that despite supporting hawkish trade policies, some Chevrolet models, including the electric Blazer and electric Equinox, contain about 20% Chinese-made parts.
Reuters first reported in November that GM had given some suppliers a deadline of 2027 to end procurement relationships with China due to geopolitical issues.
Ford, Toyota and GM did not respond to requests for comment.
Congressman John Moolener (R-Mich.), Chairman of the House Select Committee on the Communist Party of China, speaks at the 2025 CNBC CFO Council Summit in Washington, DC on December 3, 2025.
Aaron Cramage | CNBC
Growing political opposition has already led to legislative action. Michigan Republican Rep. John Moolener and Michigan Democratic Rep. Debbie Dingell introduced a bill this week that would place restrictions on connected cars, software and hardware made in China, citing national security and data concerns. This mirrors a Senate bill by Sen. Elissa Slotkin, Democrat of Michigan, and Sen. Bernie Moreno, Republican of Ohio.
Connected cars have internet access and wireless connections to other cars and trucks, and supporters say the technology can make roads safer.
“Every vehicle on America’s roads is a rotating data collection device,” Moolener said Tuesday as he announced the bill, warning that Chinese vehicles and components could collect information about their “locations, movements, people, and infrastructure” in real time.
The tough stance on Chinese cars comes as American consumers struggle with sharply tighter prices.
According to Kelley Blue Book, the average new car price in the U.S. in April was $49,461. In China, consumers can choose from more than 200 battery-powered models worth less than $25,000, including hybrids, according to DCar, a Chinese auto content and car shopping platform.
“The reality is that the U.S. is lagging behind Chinese cars, but we hope automakers can respond through innovation,” Ezell told CNBC. “For the industry to grow domestically, it ultimately needs to compete through innovation.”
Chinese brands have already used their size and low prices to capture about 20% of Mexico’s market and penetrate deep across Europe, according to Mexico’s national statistics agency INEGI and industry groups, raising concerns in Washington and Detroit that the same strategy could work in the United States.
But China hawks argue that cheaper cars could come with long-term costs. They warn that the auto industry could mirror that of solar panels, where Chinese companies have used low prices, state support and scale to dominate global supply chains, pushing out higher-cost competitors before gaining market dominance.
“China has a pattern of coming in with subsidized costs to keep prices low, destroying industries, and then raising prices,” Dingell said. “This is about the future of America. This is about the future of American workers.”
