This week, China’s regime received a huge economic blow. The European Commission decided to impose tariffs of up to 45 percent on its electric cars. Last May, the U.S. announced a similar measure, with tariffs of up to 100 percent. Canada is set to implement a 100 percent tax.
But Mexico, a trade partner of these two countries, is moving in the opposite direction, offering China great benefits, including fiscal, land, management and preferential pricing breaks.
China’s subsidized vehicle industry has become a serious threat. It is not just the usual violation of fair trade or illegal transfer of intellectual property. This is now a matter of national security.
The Vehicle Connectivity System and the integrated software of Automated Driving Software are key components. The U.S Department of Commerce has noted that this technology is not just capable of transmitting, receiving and collecting sensitive information but also capable of controlling cars remotely for destructive and harmful purposes.
Concerns over Chinese cars do not end there. U.S. congressmen sent a very revealing letter to Mexican President Claudia Sheinbaum, urging her to pay attention to this national security threat. “We ask that you quickly turn your attention to a new and growing issue: the national security risks to both our nations from the widespread presence of ‘connected’ vehicles built by companies with deep ties to the Chinese Communist Party,” the letter states.
The U.S. legislators pointed out that Chinese automakers have made significant inroads in the Mexican market, more than tripling their share since the start of this decade. And the data from that fleet of vehicles will be accessible to the Chinese Communist Party.
In 2023, the main commercial partner of the U.S. decided to extend its arms open wide to China. The result, $4.6 billion in car purchases subsidized by the communist regime. A figure lower than the $4.4 billion allocated in the acquisition of American cars.
“Cars today have cameras, microphones, GPS tracking, and other technologies connected to the internet,” said U.S. Secretary of Commerce Gina Raimondo.” It doesn’t take much imagination to understand how a foreign adversary with access to this information could pose a serious risk to both our national security and the privacy of U.S. citizens. To address these national security concerns, the Commerce Department is taking targeted, proactive steps to keep [Chinese] and Russian-manufactured technologies off American roads.”
During the last few years, China has also used Mexico and other countries as a gateway to flood the U.S. market with poor quality and low-price products. Now they are trying to use the same strategy with cars.
China has managed to become a world leader in vehicle exporting through the blood, sweat and tears of exploited workers. Its unfair trade practices include multi-million-dollar subsidies and theft of intellectual property.
The new Mexican government has a great challenge ahead. We are not just talking about corruption, murders, drug trafficking or the establishment of an authoritarian tyranny. No — now it also has to reevaluate its risky business with China.
The context of global war has activated the alarms in relation to China. For years, the Asian dragon did shady business with the entire hemisphere. Not anymore. China’s trade and investments now have a strong geopolitical and military component.
The U.S. and European countries have taken a few steps to deal with the commercial and national security threats posed by China’s automotive industry. But there is still much to do.
For now, one thing is clear: Mexico, the main U.S. trading partner, cannot keep positioning itself to become the Trojan horse of the Chinese empire. The risk is very high, and the benefits are very low.
Arturo McFields is an exiled journalist, former Nicaraguan ambassador to the OAS and former member of the Norwegian Peace Corps.
