Marketplace Morning Report: China’s Biggest EV Maker BYD Speaks Out Over Tariffs

Release Date: June 17, 2025

In this episode of Marketplace Morning Report, host Liana Byrne explores the strategic maneuvers of BYD, China's largest electric vehicle (EV) manufacturer, amid escalating global trade tensions and tariffs. The report delves into BYD's rapid growth, its responses to international trade barriers, and the broader implications for the global automotive industry. Additionally, the episode touches upon related developments in international trade affecting other sectors, particularly in Spain.

BYD's Rapid Growth and Global Ambitions

The episode begins by highlighting BYD's significant expansion both in China and internationally. Originally founded in the mid-1990s to manufacture batteries for mobile phones, BYD has diversified extensively into automobile production. Recently, BYD has outpaced Tesla in global electric car sales, establishing manufacturing facilities across Europe and other regions, thereby intensifying competition with established Western automakers.

Notable Quote:

“BYD is one of the biggest companies most people have probably never heard of.”
— Theo Leggett ([01:38])

Navigating Tariffs: Strategies and Responses

A central theme of the discussion revolves around the impact of tariffs imposed by the United States and the European Union on Chinese vehicles. The U.S. has implemented heavy tariffs on all imports of Chinese vehicles, rendering the sale of imported Chinese cars in the U.S. market economically unfeasible. The European Union has responded with its own set of tariffs, albeit lower, citing unfair subsidies from the Chinese government as justification.

Stella Li, BYD's Executive Vice President responsible for global expansion, vehemently denies the allegations of unfair subsidies:

“It's an unfair claim because there's no fact base. If any auto manufacturer goes to invest in China, they will receive equally or maybe better subsidy from Chinese government because you contribute like a job opportunity.”
— Stella Li ([02:57])

In response to these tariffs, BYD is aggressively pursuing a localization strategy. By establishing manufacturing facilities within the EU, such as the new plant in Hungary, BYD aims to circumvent import tariffs and integrate more seamlessly into local markets.

Notable Quote:

“Our strategy is making us a global company and also localize us. So even without this tariff challenge, BYD will localize our manufacturing here.”
— Stella Li ([03:44])

Theo Leggett adds context to this strategy:

“That's all very technical, but it does mean the car wouldn't attract tariffs when shipped to the EU. So it is working on this localization strategy that it seems to be very proud of.”
— Theo Leggett ([04:05])

Addressing Allegations of Forced Labor

The episode also touches upon serious allegations regarding the use of forced labor in China's automotive supply chain, particularly involving the Uyghur population in Xinjiang. Although BYD has not been directly implicated, human rights groups have raised concerns about the ethical implications of material sourcing practices.

Stella Li dismisses these claims outright:

“It's a nonsense claim. BYD is trying to be a top company. And in order to be a top company, you need to have a top supply chain with all the checks and balances.”
— Stella Li ([05:38])

Theo Leggett provides additional perspective, noting that supply chain ethical issues are not unique to Chinese manufacturers:

“A few years ago, for example, Europeans were being accused of buying cobalts that came from illegal mines in the Democratic Republic of Congo. So making sure that your supply chain is clean all the way through, that there are no abuses is something that is actually quite tricky to do.”
— Theo Leggett ([05:38])

Broader Trade Policies and Impact on Other Sectors

Beyond the automotive industry, the episode examines the implications of U.S. trade policies on other sectors, particularly focusing on Spanish exports. President Trump's trade deal with the UK has reduced tariffs on British cars, but a blanket 10% tariff remains on most goods, including critical products like steel and agricultural items.

Guy Hitchco reports on the impact of these tariffs on Spain's key exports, such as Iberian ham and olive oil:

“Spain exports more than $850 million of Iberian ham a year alone. So there's real concern...”
— Guy Hitchco ([06:41])

Jaime Fernandez, International Commercial Director at Grupo Osborne, expresses uncertainty caused by variable tariffs:

“If Spain has a 20% tariff and Morocco and Andorra have a 10% tariff... it's going to be really hard to make sure that these olives originated in Andorra and not from Spain.”
— Jaime Fernandez ([09:44])

Javier Diagimenez, Professor of Economics at IESE Business School, discusses the concept of trade diversion:

“If US tariffs are not uniform, that will create what he calls trade diversion, sending products along the cheapest route to America.”
— Javier Diagimenez ([09:29])

These developments highlight the complexities and challenges that international trade policies pose to global supply chains and economic stability.

Conclusion

The Marketplace Morning Report provides a comprehensive analysis of BYD's strategic responses to international tariffs and the broader implications for the global automotive industry. BYD's localization strategy and commitment to maintaining an ethical supply chain underscore its resilience and adaptability in a turbulent trade environment. However, the episode also illustrates the far-reaching consequences of trade policies, affecting not only Chinese manufacturers but also other global industries reliant on international trade.

Summary of Notable Quotes:

• “BYD is one of the biggest companies most people have probably never heard of.”
  — Theo Leggett ([01:38])

• “It's an unfair claim because there's no fact base... you contribute like a job opportunity.”
  — Stella Li ([02:57])

• “Our strategy is making us a global company and also localize us...”
  — Stella Li ([03:44])

• “If Spain has a 20% tariff and Morocco and Andorra have a 10% tariff...”
  — Jaime Fernandez ([09:44])

• “If US tariffs are not uniform, that will create what he calls trade diversion...”
  — Javier Diagimenez ([09:29])

This detailed summary captures the essence of the podcast episode, providing listeners with a comprehensive understanding of BYD's position in the global market and the intricate dynamics of international trade affecting various industries.