Tariffs won't fix U.S. autos, fair and positive competition might

For a country that once defined the modern automobile, the United States now finds itself at a crossroads. Today’s automotive landscape is being reshaped by rapid technological change, evolving consumer demands and intensifying global competition, much of which the United States is actively shutting out.

Truth be told, the American auto industry is in big trouble. Not only was its new energy sector struggling to gain competitiveness in recent years, but its traditional sectors were also facing increasing competition from global competitors and mounting risks generated by trade tensions.

As the Trump administration vowed to continue using tariffs to push for trade negotiations, the EU threatened to impose retaliatory tariffs on over 12 billion dollars worth of imported U.S. auto parts and vehicles.

The challenge also stems from within the U.S. domestic market. Nearly 300 million vehicles are currently registered in the United States, and the average age of light vehicles is approaching 14 years — a sharp contrast to China and Germany. This aging fleet poses serious implications for safety, fuel efficiency and consumer cost. More importantly, it underscores an urgent need: American drivers need access to newer, cleaner and more affordable cars. Yet the current trade regime is doing the opposite — limiting options, raising prices and constraining market dynamics at the precise moment when revitalization is needed most.

More competition, not less, could offer a way forward for both American consumers and automakers. Vehicles produced by Chinese automakers differ significantly from their American counterparts in terms of platform design, efficiency architecture and digital interface. They are not merely low-cost alternatives — they often reflect different understandings of what mobility should look like from a modern perspective.

Allowing such products into the U.S. market could help enrich consumer choices while offering American manufacturers valuable insights into evolving customer expectations — that will make them better off, not worse. Design preferences, software integration, energy efficiency — all of these can benefit from cross-market exposure. Rather than viewing this as a threat, the U.S. industry could benefit from seeing it as a mirror: a chance to reassess, recalibrate, and respond to the global evolution of carmaking.

This potential, however, is hard to realize in a closed market. Competition is what drives companies to respond faster and think more creatively. Yet today, many American auto firms remain structurally disconnected from innovation ecosystems that should be their closest allies — most notably, Silicon Valley. Even as vehicles become increasingly intelligent, with integrated interfaces and digital control hubs, few major U.S. automakers have built robust partnerships with software and AI developers. Auto companies should evolve and allow new players to emerge in the field. That is hard to realize when the U.S. trade regime is covering the eyes of its customers and its automakers.

The recent report on Stellantis’ failed SmartCockpit partnership with Amazon is yet another testament to the traditional U.S. automakers’ struggle to adapt to innovation. This gap has less to do with technical capacity and more to do with institutional inertia — a problem that is only made worse when external competition is blocked. Without competitive urgency, the incentive to restructure internal systems and reimagine vehicle experiences remains weak.

In addition to passenger vehicles, the commercial vehicle segment also presents a different but equally revealing challenge. Both China and the United States operate large-scale commercial fleets, yet neither has established dominance in the development of next-generation commercial EVs. Battery-swapping technologies, modular powertrain configurations, and alternative battery chemistries such as sodium-ion are still in formative stages. This space remains wide open — technologically, commercially and geographically.

That openness is an opportunity. Commercial mobility is deeply contextual. A successful electric delivery van in Los Angeles may look very different from what works in Shanghai. Finding viable, scalable solutions requires input from multiple markets and manufacturers. It requires experimentation, iteration and adaptation — all of which are enhanced, not hindered, by global competition. In this domain, the United States and China are not in a win-lose contest. They are both contenders in an emerging global market that will benefit from shared learning and differentiated development.

Even in areas where American manufacturers have long held an edge, such as brand trust and after-sales service, engagement matters. American auto brands enjoy high recognition in global markets, but that reputation must now be supported by evolving content. In the digital age, brand strength is no longer anchored only in performance or durability. It increasingly hinges on user experience, constant evolution, and most importantly, being able to identify or even shape new demands. Competing alongside new entrants helps clarify what these expectations should look like and which firms are ready to meet them.

At the center of all these dynamics lies the American consumer. The U.S. market is not like others. Its vehicle usage patterns, urban layouts, climate diversity and cultural preferences, especially for pickups, SUVs and hybrid formats, make it a unique testing ground for automotive design. Many Chinese EVs are not yet adapted to this landscape. But some are evolving quickly. More importantly, their presence could push domestic automakers to rethink how best to serve their own people. Tariffs remove this feedback loop. They delay the discovery process that helps align industrial output with real-world needs.

Maintaining the current tariff regime may serve short-term political messaging, but it undermines the very goals it claims to pursue: strengthening U.S. manufacturing, lowering costs for American families, and preparing for the next generation of mobility. Tariffs on Chinese EVs and the 25 percent tariffs on foreign-made vehicles do not make the U.S. auto sector more resilient. They make it more insular, more expensive and more detached from global innovation cycles. Trusting their old Chevys is the American people’s romantic nostalgia. But being only able to afford a second-hand Chevy is the American people’s unfortunate tragedy.

If the United States intends to make its automotive industry great again — not as a nostalgic symbol of the past, but as a forward-looking engine of future competitiveness — it must rethink how openness, learning and adaptation are built into policy. As the whole country begins to rethink responsible use of tariffs, removing the punitive tariffs on Chinese EVs and re-evaluating the Section 232 vehicle tariffs structure would be a meaningful step in that direction.

American drivers deserve more than fewer choices and higher prices. They deserve access to the best vehicles the world can offer — regardless of where they are made. American automakers deserve more than protection; they deserve an ecosystem that challenges and supports them to do better. Fair and positive competition is not a compromise. It is the cornerstone of industrial renewal.

This article was originally published on the Xinhua website on June 6, 2025