Ford CEO Jim Farley recently said that the US must carefully weigh how and whether Chinese automakers should enter the American market. As a cautionary tale, he pointed to Europe. At an Automotive News conference in September, Ford CEO said that the US must “be extremely careful around how the Chinese OEMs come to our country,” and cited the pressure on Europe’s auto industry as Chinese companies have rapidly grabbed market share there.Responding to a question on Chinese auto industry entry in America, Anduril founder Palmer Luckey warns that Chinese cars could take over the American market if the US removed its trade barriers. But does not see tariff as the ‘solution’. He said, “People would buy these Chinese cars if they were for sale in the United States.”“The reason Chinese-manufactured cars have not taken over the US is not because Americans don’t want them. It’s largely due to American policy being very protectionist against Chinese cars. People, I think, unfortunately, would buy these Chinese cars if they were for sale in the United States. People can say they want to support the US, but at the end of the day, they want to provide the best quality of life for their family. If they have a choice between an American truck and a Chinese truck, a Chinese new TV, a Chinese new computer, and a Chinese new HVAC system, how can I blame them?”
‘America cannot compete with Chinese car makers on cost’
He said that America cannot compete with China’s cheap cars through tariffs alone… it needs to make manufacturing cheaper at home. The CEO of America’s biggest defence technology company said, “The only way we can solve this is for the United States to become competitive with China again, which means we need to get our energy costs down. We need to get our resource extraction costs down.”He added further, “These cars in China are cheap. It’s not magic. It’s because the cost of resource extraction is lower, the cost of making steel and aluminum is lower, and the cost of building a factory is lower. That’s why you’re able to buy an awesome car for $10,000 in China, and here the cheapest thing you can buy is a piece of shit.”
US ban on Chinese car makers
The US so far is effectively sealed off from Chinese cars through a ban on Chinese-made vehicle software and tariffs that exceed 100%. Still, auto companies’ executives worry that that will not hold long-term, and lobbyists for automakers, dealers and parts suppliers have pressed US lawmakers for a permanent ban.Last month, transportation Secretary Sean Duffy in a letter to Farley expressed concern that Ford’s deals with Chinese companies left the Michigan automaker “intertwining its future with Chinese state-backed enterprises.”
