China’s foray into the automotive industry makes perfect sense for any serious, powerful economy. Every major economic power has its own car brands. China has them now, in droves. Nearly every province has one. That’s the equivalent of all 50 states in the U.S. having their own car brand. Only with China, they are not selling at home; they are also selling globally. But there is much more to it than that. China’s auto parts makers are ubiquitous in American automotive supply chains. In fact, multinational car makers like Ford and Tesla even suggested their Chinese partners set up shop in Mexico to avoid Section 301 tariffs. And so now, the Chinese auto industry is seen as a threat to U.S. automakers, even if the main threat is being assessed primarily by those on Capitol Hill and in the think tank world. The multinational automakers remain embedded, as a recent report by Strategy Risks recently showed.
Rep. Raja Krishnamoorthi (D-IL-08), Ranking Member of the House Select Committee on the Strategic Competition Between the U.S. and the Chinese Communist Party (CCP) said in a hearing on Thursday, Dec. 11 that despite tariffs, China’s auto parts makers ship through third countries. And although most of those countries in Southeast Asia now have higher tariffs, they are still lower than China’s.
Krishnamoorthi held up a brake hose made by Chinese multinational Sunsong, and a window regulator, a product used to operate power windows, made in China by a company called A-Premium.
“They transship through third countries, and we do not do enough to stop it,” he said. “These are in pretty much every American car. This brake hose is made by SunSong which is suspected of transshipping through Thailand and my staff bought this at a store down the street. The window regulator we bought on Amazon,” he said, using the moment to tout a bill that would criminalize transshipment.
Legislation to address this issue—H.R. 1869, commonly referred to as the ‘Protecting American Industry and Labor from International Trade Crimes Act of 2025’— would establish a new task force within the Department of Justice (DOJ) dedicated to investigating and prosecuting trade fraud, duty evasion, and transshipment that undermines U.S. tariffs. It passed in the House during the last Congress. CPA has spoken out in support of this legislation.
Much of the discussion centered on advanced automotive technologies rather than basic machine parts like carburetors and brake pads. The so-connected “connected cars” were top of mind here. Often referred to as “laptops on wheels,” many of these vehicles rely on chips made in China or devices known as LiDAR—or Light Detection and Ranging—a system used for autonomous vehicles. One of them is made by a Chinese giant called Hesai Technology, and can be found on a government entity list. Committee members want to shut that down.
Elaine Dezenski, Senior Director and Head of the Center on Economic and Financial Power at the Foundation for Defense of Democracies said the U.S. has failed to build the required ecosystem for this type of vehicle.
Rep. Ritchie Torres (D-NY-15) asked Dezenski if China’s overcapacity in automotive was an accident or it was incompetence.
“I think they understand the problem of over-capacity,” Dezenski said, “But the subsidies still flow to the state companies that push for auto manufacturing and that leads to greater exports, and there is no indication that the CCP would push back against those exports. I think they will eventually have to do it, but in the meantime, they will maximize the export model and I think they can hold out a bit longer, actually, which is why you have to act fast.”
Dezenski was one of three main witnesses during the hearing. Torres asked her if U.S. manufacturing had a chance to rival China, as the country did back in the 1940s when the automotive industry was considered part of the “arsenal of democracy.”
Dezenski laid it out for him, saying the government has not yet defined what such an arsenal looks like today. “We can protect ourselves with tariffs, but our allies are not doing that,” she warned. “You have to do that to get pressure on the market, and that’s how you get real influence over China,” she added.
China’s Automotive Market Deemed Existential Threat, With Worries Washington Can’t Count on EU for Help
China’s foray into the automotive industry makes perfect sense for any serious, powerful economy. Every major economic power has its own car brands. China has them now, in droves. Nearly every province has one. That’s the equivalent of all 50 states in the U.S. having their own car brand. Only with China, they are not selling at home; they are also selling globally. But there is much more to it than that. China’s auto parts makers are ubiquitous in American automotive supply chains. In fact, multinational car makers like Ford and Tesla even suggested their Chinese partners set up shop in Mexico to avoid Section 301 tariffs. And so now, the Chinese auto industry is seen as a threat to U.S. automakers, even if the main threat is being assessed primarily by those on Capitol Hill and in the think tank world. The multinational automakers remain embedded, as a recent report by Strategy Risks recently showed.
Rep. Raja Krishnamoorthi (D-IL-08), Ranking Member of the House Select Committee on the Strategic Competition Between the U.S. and the Chinese Communist Party (CCP) said in a hearing on Thursday, Dec. 11 that despite tariffs, China’s auto parts makers ship through third countries. And although most of those countries in Southeast Asia now have higher tariffs, they are still lower than China’s.
Krishnamoorthi held up a brake hose made by Chinese multinational Sunsong, and a window regulator, a product used to operate power windows, made in China by a company called A-Premium.
“They transship through third countries, and we do not do enough to stop it,” he said. “These are in pretty much every American car. This brake hose is made by SunSong which is suspected of transshipping through Thailand and my staff bought this at a store down the street. The window regulator we bought on Amazon,” he said, using the moment to tout a bill that would criminalize transshipment.
Legislation to address this issue—H.R. 1869, commonly referred to as the ‘Protecting American Industry and Labor from International Trade Crimes Act of 2025’— would establish a new task force within the Department of Justice (DOJ) dedicated to investigating and prosecuting trade fraud, duty evasion, and transshipment that undermines U.S. tariffs. It passed in the House during the last Congress. CPA has spoken out in support of this legislation.
Much of the discussion centered on advanced automotive technologies rather than basic machine parts like carburetors and brake pads. The so-connected “connected cars” were top of mind here. Often referred to as “laptops on wheels,” many of these vehicles rely on chips made in China or devices known as LiDAR—or Light Detection and Ranging—a system used for autonomous vehicles. One of them is made by a Chinese giant called Hesai Technology, and can be found on a government entity list. Committee members want to shut that down.
Elaine Dezenski, Senior Director and Head of the Center on Economic and Financial Power at the Foundation for Defense of Democracies said the U.S. has failed to build the required ecosystem for this type of vehicle.
Rep. Ritchie Torres (D-NY-15) asked Dezenski if China’s overcapacity in automotive was an accident or it was incompetence.
“I think they understand the problem of over-capacity,” Dezenski said, “But the subsidies still flow to the state companies that push for auto manufacturing and that leads to greater exports, and there is no indication that the CCP would push back against those exports. I think they will eventually have to do it, but in the meantime, they will maximize the export model and I think they can hold out a bit longer, actually, which is why you have to act fast.”
Dezenski was one of three main witnesses during the hearing. Torres asked her if U.S. manufacturing had a chance to rival China, as the country did back in the 1940s when the automotive industry was considered part of the “arsenal of democracy.”
Dezenski laid it out for him, saying the government has not yet defined what such an arsenal looks like today. “We can protect ourselves with tariffs, but our allies are not doing that,” she warned. “You have to do that to get pressure on the market, and that’s how you get real influence over China,” she added.
Europe Not Entirely On Board, Witnesses Say
When it comes to “working with allies,” however, Europe was a question mark.
“We can start creating a supply chain among democratic nations, but you will need common tariff regimes,” Dezenski said. “I do worry about the Europeans and whether or not they are really coming along.”
Charles Parton, Senior Associate Fellow of the Royal United Services Institute in the U.K. said he does not think the U.K. auto industry is prepared to decouple from China autoparts, which could put its U.S. market at risk.
“I don’t think that the U.K. has even considered the impact of China on their industry,” Parton said. “If the U.S. market is ever closed to British cars, we better wake up…the U.S. is a very important market for Europe. If you say to the Europeans one day, look, if you want to access our market, these are the rules and you should follow them.”
Parton suggested the creation of a new mechanism for trade comprised of free economies; a truly bifurcated system between China and the West, led by the U.S.
Democrat Member Says ‘America First’ is the Way
Auto industry CEOs are incentivized to think about lowering costs and so historically that has meant offshoring manufacturing. Peter Ludwig, Co-Founder and Chief Technology Officer of Applied Intuition—an autonomous vehicle solutions company based in Silicon Valley—said company executives and Washington will need to focus less on short term pops in their share price and think long term.
“When you focus alone at cutting costs, you can achieve a short-term bump in GDP and in your stock price,” Ludwig said. “But the loss of these critical industries is a far greater cost than the short-term benefit of a rising stock market. You have to take that into consideration.”
Rep. Jill Tokuda (D-HI-2) insisted on getting more allies on board with the U.S. position on trade, a call that has become common among Democrats since the Biden administration. But perhaps the biggest highlight from Tokuda, in particular, during her Q&A was when she turned to Chairman John Moolenaar (R-MI-02) and touted the ‘America First Trade Policy’ agenda.
Dezenski told the Committee that the CCP is waiting out Trump once again.
“They are betting Washington won’t strike back and will not protect our markets. Tariffs are good, but we need to do more,” Dezenski said. “They suspect the EU will not get their act together. And they are betting that Mexico will be a back door, probably for parts, but maybe more eventually. So what is our counter to that? What is our strategy?”
Rep. Dusty Johnson (R-SD-AL) rounded out the hearing recalling Washington’s concerns about telecom years ago. He likened what became of the U.S. role in internet communications technologies to what may eventually happen to the auto industry. It’s one thing that the industry was already increasingly producing cars in Mexico, another that China companies are embedding themselves into the U.S. automotive supply chain and positioning themselves to be the indispensable tech resource for autonomous cars.
“When I worked in telecom, I remember everyone was worried about Huawei and we embarked on a billion-dollar rip and replace voyage, and we are still not done with it…and here we are with advanced cars and Chinese LiDAR running so much of our transportation infrastructure,” he said. “We need to shut the barn door before all of the cattle run out.”
CPA issued a statement in mid-October applauding the Trump administration’s goals to strengthen America’s industrial base, rebuild domestic capacity, and safeguard the nation’s economic and national security from China overproduction.
“We are no longer in a world where free trade at any cost serves America’s interests,” said CPA Chairman Zach Mottl. “We are in a world where economic strength, production, and national security are one and the same. The era of global dependency on the CCP is over. For decades, Wall Street, multinational corporations, and globalist institutions helped finance China’s rise at the direct expense of American workers and manufacturers. The Trump administration must take bold, decisive action to decouple from China and prioritize the American worker, the American producer, and the American nation.”
In October, CPA proudly joined several of its member companies to help launch the Industry Alliance for Trade EnforcementNOW—an industry-led alliance created to confront systemic trade fraud and rally companies to take action. The Alliance’s first mission is building awareness and prompting near-term action. Trade fraud is happening at scale across multiple industries, and law-abiding U.S. businesses are often unsure how to proceed, many fearing retaliation from customers or suppliers if they speak out. But in the meantime, honest U.S. companies bear the cost. Since Section 301 tariffs were announced in 2018, an estimated $194 billion in government revenue has been evaded—not counting additional exposure under Section 232, Section 201, IEEPA, or AD/CVD duties and penalties. The Alliance stands ready to inform and collaborate with the White House, federal agencies, and Congress—protecting American workers, businesses, communities, and public revenue.
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