UPDATE 2 – White House details plan to protect US auto sector and avoid second ‘China shock’

White House economic adviser Lael Brainard on Monday laid out the Biden administration’s broad approach to protecting the U.S. auto sector from what she sees as unfair trade actions by China. “China is flooding global markets with a wave of auto exports because of its own overcapacity. We saw a similar strategy in the China shock of the early 2000s that hurt our manufacturing communities, and this administration is determined that we do not see a second China shock,” Brainard told the Detroit Economic Club.

“That means putting safeguards in place now before a flood of unfairly priced and undervalued cars undermines the U.S. auto industry’s ability to compete on the global stage,” she added at the Detroit event. Relatively few Chinese-made cars and trucks are imported into the United States.

The U.S. Commerce Department on Monday proposed banning critical Chinese software and hardware in connected vehicles from U.S. roads over national security concerns, a move that would effectively ban nearly all Chinese cars from entering the U.S. market. “Americans should drive the car they want, whether it’s gasoline, hybrid or electric,” Brainard said. “But if they choose to drive an electric vehicle, we want to make sure it was made in America and not China.”

Brainard’s intervention comes as the fate of the auto industry and pressure from China have become a major theme in the 2024 presidential election, with Republican candidate Donald Trump suggesting that China could dominate future auto production. Earlier this month, the Biden administration blocked steep tariff hikes on Chinese imports, including a 100% tariff on electric vehicles, to bolster protections for strategic industries from Chinese state-run manufacturing practices.

The White House wants to prevent Chinese automakers from setting up factories in Mexico to circumvent high tariffs. “We’re going to have to work with our partners, Canada and Mexico, to address China’s overcapacity in electric vehicles as we look toward the midterm review of the USMCA in 2026,” Brainard said of the U.S.-Mexico-Canada trade deal.

She said U.S. officials were already in talks with Mexican officials and shared U.S. concerns about China using Mexico as a platform to export to the U.S. at artificially low prices. Asked about the possibility of a Chinese automaker building factories in the U.S., Brainard said that would happen “with a set of safeguards that we’re putting in place now before we face those issues.”

In response to a question about Trump’s comments that he opposed the administration’s mandate to sell electric vehicles, Brainard called the idea “completely absurd.” She said the U.S. needs to invest in electric vehicles or Americans will have fewer choices.

(This story has not been edited by Devdiscourse staff and is auto-generated from a syndicated feed.)