China’s auto sector is increasingly drawing scrutiny from global automakers and politicians.

In the early 1980s, China’s auto industry barely existed. Today, the country has the capacity to produce around 40 million vehicles annually – enough to supply half the world.

Only about 25 million cars will be sold in the country in 2023, according to Dunne Insights, a company that tracks the car market in China and other Asian countries. To get rid of the surplus, China will export more and more. It sent cars to more than 100 countries last year, according to Michael Dunne, CEO of Dunne Insights.

Dunne and other insiders say it’s only a matter of time before Chinese brand cars arrive in the US. A few brands, such as Volvo and its subsidiary Polestar, are already owned by a Chinese company, Geely, even though the brands are based in Sweden.

“I call it the big Godzilla,” Dunne said. “The world has never seen an automotive industry of this size and scale.”

Surveys show that a large share of American consumers, especially young people, would like to buy a Chinese car, despite general privacy concerns.

Not everyone shares that enthusiasm. President Joe Biden last month introduced tough tariffs on Chinese electric vehicles, effectively doubling the list price, which can otherwise be as cheap as $11,500. The administration says Chinese companies have benefited from unfair government support, and that Chinese imports of electric vehicles threaten the Biden administration’s large investments in electric vehicles.

Some politicians have gone further. Sen. Sherrod Brown, D-Ohio, said on social media platform X: “Tariffs are not enough. We need to keep Chinese electric vehicles out of the US. Period of time.”

Tesla CEO Elon Musk criticized the tariffs but said earlier in 2024 that without trade barriers, most Western carmakers would be demolished by Chinese competition.

But some auto industry insiders are skeptical that tariffs will be able to hold back Chinese imports for long. Some say they can even do more harm than good.

Bill Russo, a former Chrysler executive who runs a Shanghai-based consulting firm called Automobility, said recent history shows the limitations of tariffs.

The trade war that began under President Donald Trump may have been aimed at Beijing, but it hurt US automakers by raising the cost of parts, Russo said. Ultimately, it may also have accelerated the globalization of Chinese companies by forcing them to invest in other countries, which would help them avoid the tariffs.

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