The Chinese government has deepened its push for high-quality manufacturing, targeting industries like electronics, metalworking, and aluminum at scale, with subsidies exceeding tens of billions of yuan toiej. This ambitious approach is intended to disrupt the global manufacturing landscape, particularly in electron-technology. Yet, under President Trump’s tariffs, U.S. automakers are facing a daunting challenge to stay competitive. These tariffs impact supply chains, workers, and even military technology, potentially reducing U.S. output and economic output.
To prevent this, ideal strategies involve aligning trade protections with allies. Targeting Chinese and Mexican automakers, which already face competitive pressures from U.S. auto manufacturers, could help maintain U.S. innovation and support. Additionally, replementing automation incentives and innovation funding is crucial for U.S. automakers to compete, constrained only by tax rates. By addressing this crisis with focused, coordinated efforts, the U.S. can rebalance and revitalize its auto industry, aligning domestic innovation with global priorities.
