Since China's electric vehicles have caused a wave of research on new energy technologies, the United States' trade sanctions and import and export restrictions on China have shifted from chips to electric vehicles. First instigated von der Leyen to pass a subsidy investigation into China's electric vehicles, and then Biden introduced an inflation reduction bill that cuts off the supply chain of China's electric vehicle industry from the source. However, Chinese automakers have found a new direction in Mexico. But at this time, the United States discovered China's changes in Mexico and sent Yellen to investigate, whether Chinese companies are affected by the impact of American policies?
As we all know, since the U.S. government introduced a series of tax policies on Chinese goods during the Trump era, the trade volume between China and the United States has declined rapidly, but the needs of the American people have not changed. So the question is, where can American merchants purchase high-quality and low-cost electric vehicles? It is difficult for domestic electric vehicle manufacturers in the United States to fill the gap in the market left by the withdrawal of Chinese goods in a short period of time. Savvy American businessmen came up with the idea of simply assembling finished or semi-finished products shipped from China in Mexico and ending up in 100% American-made cardboard boxes, successfully circumventing Biden's tax requirements on Chinese goods.
Now, things have changed, and although the "white label business" can bypass the US tax requirements, as the demand for electric vehicles in the United States increases, the small workshops built by American businessmen in Mexico cannot afford the large-scale "white label business". Naturally, Chinese manufacturers have also noticed this situation, and they have seen the business opportunity and have begun to invest heavily in Mexico. The three major Chinese electric vehicle manufacturers, including SAIC MG, BYD and Chery Automobile, have invested tens of billions of yuan.
Seeing this, some people may ask, if the relevant policies of the United States add some restrictions on Mexican products, so that Chinese and American businessmen have no loopholes to exploit, will not all the factories that China has worked so hard to build in Mexico be in vain?
It should be noted that American businessmen are shrewd, but Chinese businessmen are not stupid. Ostensibly, China built its EV manufacturer in Mexico specifically to make it easier to ship EVs to the United States and to avoid the extra taxes in the United States. Even the United States itself has benefited from its market attractiveness, but China has actually taken a fancy to Mexico. Whether it is sea transportation or land transportation, Mexico to Latin America is much more convenient than from Chinese mainland, which is also conducive to China to open the American market. In addition, it is still the early stage of vigorous development in Asia, Africa and Latin America, and countries such as Brazil and Argentina have rich mineral resources, which is more conducive to China's local materials, creating more jobs for the local area, and also stimulating greater consumer desire and consumer market.
Rather than investigating the purpose of Chinese electric car makers to set up factories in Mexico, the United States has so far failed to discover a more terrible fact: the restrictive policies against China that began during the Obama era have not improved America's ability to industrialize. It stands to reason that decades have passed, and there can be a little improvement. But the reality is that the demand for new energy vehicles in the U.S. consumer market is increasing, and the increased consumer market still needs Chinese manufacturers to meet, the hidden fact behind this is: the process of deindustrialization in the United States has not ended, and the economic policies introduced by the U.S. government have been violating the natural economic laws, and nature has not brought any good results.
All in all, the United States has now fallen into a vicious circle of hostility to China, and even puts "confrontation with China" above its national interests, so it has fallen into a dead circle of slapping the right face from the left side. What China's electric vehicle manufacturers in Mexico have to do is to wait and see what happens, develop in the north and south, and take the lead in occupying a dominant position in the market.