Trump says open to China building cars in US as Xi visit looms

President Donald Trump suggested he might be willing to allow a Chinese car company to build electric vehicles in the US if it did so with American workers, while pledging to maintain the effective US ban on imported vehicles from China.

Trump, speaking in a Fox News interview, rejected the suggestion that he would allow Chinese cars to be imported into the US. “We don’t allow his cars into the United States, and we never did,” Trump said, referring to Chinese leader Xi Jinping, adding that if that wasn’t the case the US automobile market would be “overrun”.

“Now, if China wanted to come in, and open a plant to build their cars here, I’d be okay with it — Japan does it — but they hire our people,” Trump said. “The big thing is they hire our people, they use our people.”

“What I don’t want is them to build in Mexico and just, you know, build it inexpensively and ship it across the border,” he said. “That’s un-happening.”

Cheap, tech-laden Chinese EVs from companies like BYD and Geely are rapidly gaining global market share. They’re also appearing in both Canada and Mexico, amplifying concerns among US auto executives that they could soon seek inroads in America.

Currently, Chinese vehicles are essentially shut out of the US market by steep tariffs and a commerce department ban on national security grounds that covers so-called connected vehicle systems from US adversaries including China.

Trump’s comments come weeks before a planned summit with Xi in Washington, though he has made similar remarks before.

In a January speech at the Detroit Economic Club, in the heartland of the American motor vehicle industry, Trump indicated he would be open to allowing Chinese automakers to build cars in the US, saying “let China come in”.

Ford CEO Jim Farley and Trump cabinet members earlier this year held a preliminary informal discussion about how a potential framework might work in which Chinese automakers could build cars in America while offering some protection for domestic companies. No decisions were made at the time on the matter, according to people familiar with the discussions.

Michigan Senator Elissa Slotkin, a Democrat whose state includes the headquarters of Ford Motor Co in Dearborn and General Motors Co in Detroit, warned earlier this week against letting Chinese cars enter the US marketplace at all.

“We hear rumors that Trump is planning to allow Chinese cars to be sold in the US, as part of a larger deal he’s putting together,” Slotkin said, adding that to do so would be a “strategic mistake” that would “irrevocably impact” not only the American auto industry but the overall manufacturing capacity of the US, risking jobs.

Trump told Fox News the suggestion that he would allow Chinese cars to be imported into the US was a “total phony rumor”, adding he’s the “only one stopping them”.

Slotkin and Bernie Moreno, an Ohio Republican senator who owned auto dealerships around Cleveland before entering politics, introduced legislation that would ban connected vehicles, software and hardware linked to adversarial countries including China.

The broadly written measure, backed by Ford, GM and the United Auto Workers, would prohibit the sale of connected vehicles by automakers that are more than 15% owned by Chinese entities. However, the legislation as originally drafted has raised concerns that it may inadvertently bar other foreign automakers like Mercedes-Benz Group AG, which has nearly 20% Chinese ownership.

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