David A. Gantz, “Excluding Mexican and Chinese EVs from the United States” (Houston: Rice University’s Baker Institute for Public Policy, March 19, 2024), https://doi.org/10.25613/SFE7-ZW32.
Concerns are growing both within the Biden administration and in Congress over a potential flood of low-priced electric vehicles (EVs) from China, directly or more likely via third countries such as Mexico. BYD, a leading Chinese producer, has also announced that it intends to establish production facilities in Mexico soon, with an initial capacity of 150,000 cars annually. While BYD has contended that such production would be for the local Mexican market and for export to the more than fifty countries with which Mexico has free trade agreements, observers believe that US market is the real prize given its enormous size, with more than 15.5 million auto and light trucks sold in 2023. A brief discussion of the current situation and remedial legal and practical measures likely to be applied to trade in passenger vehicles under the USMCA and relevant WTO law is followed by the rationale for BYD and perhaps other Chinese auto producers to build factories in Mexico; the legal and practical options for BYD and other Chinese autos and SUVs assembled in Mexico to enter the US Market; and the actions available to the US government to exclude those imports from the United States. Finally, I examine the implications of the exclusion policies that appear likely to be followed by either Democratic or Republican administrations in the foreseeable future, and offer some recommendations.
This paper is a work in progress and has not been through editorial review. View the full working paper (PDF).
This material may be quoted or reproduced without prior permission, provided appropriate credit is given to the author and Rice University’s Baker Institute for Public Policy. The views expressed herein are those of the individual author(s), and do not necessarily represent the views of Rice University’s Baker Institute for Public Policy.
