Open trade is a great thing. It’s an equalizer of sorts, allowing countries and people around the world to enjoy products from everywhere else. For much of humanity’s history, we had access to only a limited, local group of goods with some “exotic” goods being traded only by the rich. It’s only in the last two or three generations that humans have had access to just about anything available anywhere on the planet. If I make a widget, I can sell it to almost anyone, anywhere, planet-wide. If someone on the other side of the world does the same, I can buy from them.
There’s a lot to be said about that kind of access.
But humans are tribal beings. We don’t like it when it feels like someone, somewhere might be benefiting where we are not. And so we have trade barriers.
One of the most recent examples of this kind of behavior has been the barrier keeping China from selling vehicles in the United States. I feel it’s unfair to block Chinese manufacturers from entering the U.S. market and selling their wares. If they meet our safety and emissions requirements, why can’t they be sold here?
I do, however, have one caveat.
They must abide by the same rules required for us to sell cars to them in their country. That’s only fair.
Until very recently (right about the time China decided to try to export cars to other countries, but that’s surely a coincidence), automakers had to abide by some pretty thick rulebooks to sell cars in China. Even with some relaxation of those rules, most of them still apply.
Here’s a bullet list of those requirements:
- The automaker must create a joint 50/50 venture with a locally-owned partner. Such as General Motors’ partnership with SAIC Motors. And Ford’s with Chongqing Changan Automobile and Jiangling Motors Corp.
- Vehicles sold in China must be manufactured there to avoid very high tariffs.
- New Energy Vehicle (NEV) quotas require large percentage of the vehicles being sold use battery-electric or similar non-combustion technologies.
- Data must be kept in China with national security regulations not allowing software and connected systems’ data be exported from the country.
- Supply chains must be localized. Very little importation of any parts or products is allowed.
Those are the most stringent. There are a lot more.
So my proposal is this: the U.S. should allow Chinese vehicles to enter our market. The caveat being that those Chinese automakers must abide by the same rules our manufacturers have had to follow to sell in China.
Suddenly those cheap, cost-undercutting cars that Detroit is so afraid of won’t be so cheap. Plus American automakers would be forced to adapt a little to keep up with trends introduced by the Chinese.
Similar to the 1970s when Japanese makes were first arriving here. Look at them now. Most of them are made here to be sold here and are often more U.S.-made than their Detroit counterparts.
We should definitely let China sell cars in the U.S.
This article originally published at the AaronOnAutos Substack.
