Can the U.S. Keep Chinese Cars Out?

Summary

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Podcast Summary: The Journal.

Episode: Can the U.S. Keep Chinese Cars Out?

Date: June 3, 2026
Hosts: Jessica Mendoza & Ryan Knutson (featuring reporter Ryan Felton)

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Episode Overview

This episode explores the rapid global rise of Chinese carmakers—especially in electric vehicles—and the growing presence of Chinese cars in markets adjacent to the U.S., such as Mexico and Canada. With Chinese car models boasting advanced features and competitive prices, the hosts and guest discuss why these cars are effectively banned in the U.S., the resulting anxieties in the American auto industry, and whether it's possible—or inevitable—that these vehicles will one day enter the U.S. market.

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Key Discussion Points & Insights

1. Chinese Carmakers’ Rapid Growth (03:59–08:41)

• BYD’s Big Entrance in Mexico:
  • BYD, a major Chinese EV brand, celebrated its successful first year in Mexico, with sales far surpassing company goals—moving from an initial goal of 50,000 to 80,000 cars a year, capturing a quarter of the Mexican auto market.
• Rising Popularity and Sightings in Border Areas:
  • "There's routinely sightings now of these cars in border towns..." —Ryan Felton [01:32]
  • Although Chinese cars are banned in the U.S., their proximity is increasing American awareness and curiosity, especially around Texas border towns.
• Early Dismissal by U.S. Auto Industry:
  • Initially, Chinese cars were mocked for poor design and performance. Even Elon Musk, when asked about BYD in 2010, “literally just bursts out laughing.” —Ryan Felton [05:04]
  • Since then, major investments and government prioritization have catapulted Chinese automotive tech forward.

2. Technological Leap and Appeal (05:16–08:41)

• Rapid Product Evolution:
  • American execs returning to China’s 2023 auto show "were just kind of blown away by what they saw." —Ryan Felton [05:25]
• Features and Value:
  • Chinese cars offer features U.S. brands often lack—rotating dash screens, massage seats, karaoke machines, and unusually long range (e.g. Geely's SUV offering ~800 miles combined range).
  • “China’s best selling small EV… at $10,000 US…I can understand why.” —Ryan Felton [06:34]
• Mass-Market Affordability:
  • Aggressive pricing has rapidly won market share wherever Chinese cars are sold, like Europe and Southeast Asia. “Wherever China's automakers have gone around the world…they've really sort of immediately gobbled up market share and won over locals…” —Ryan Felton [08:20]

3. How the U.S. Keeps Chinese Cars Out (08:41–10:17)

• No Explicit Ban, But De Facto Blocked:
  • The U.S. blocks Chinese vehicles primarily via very high tariffs (often >100%), making them prohibitively expensive.
  • National security concerns also play a role: "The US Government has prohibited the software inside the cars, basically comparing it to a Trojan horse." —Jessica Mendoza [09:29]
  • Strict prohibitions: Any “connected vehicle software” from Chinese suppliers is banned, plus forthcoming hardware restrictions.
    [09:41] “You can’t have any Chinese...connected vehicle software...anything in your car talking to the cloud.” —Ryan Felton

4. Rising Interest in the U.S. and Industry Fears (10:17–13:14)

• Consumer Interest:
  • Some Americans, especially in border regions, import Chinese cars for personal use. Price remains the overwhelming draw. Dario Araiza, a dual US/Mexico citizen, explained it was “no contest” due to affordability and features. [10:46]
• Growing Appetite:
  • Recent surveys indicate that as much as 30% of U.S. consumers would consider buying a Chinese-made car, an “extraordinary” number amid strong official opposition. —Ryan Felton [11:29]
• Industry Anxiety:
  • U.S. carmakers view this as “an existential threat.” If Chinese automakers could enter freely, domestic producers fear they couldn’t compete on price due to China’s lower labor costs, government subsidies, and supply chain efficiencies. [12:10]
  • The average new car transaction price in the U.S. is now about $50,000, versus Chinese competitors’ typical $30,000 and under. —Ryan Felton [12:44]

5. The Political Push to Keep Doors Closed (13:14–14:54)

• Legislative Moves:
  • A new bill, the Connected Vehicle Security Act, aims to "hermetically seal" the U.S. market from Chinese EVs, outlawing both sales and manufacture, as well as joint ventures and mergers involving Chinese firms.
  • “This is about hermetically sealing the US Market from predatory Chinese companies…with one simple goal, which is to destroy our auto sector…” —Senator Bernie Moreno [13:47]
  • American car companies support the move, simultaneously citing unfair advantages and respect for Chinese car quality.

6. Can the U.S. Keep Chinese Cars Out Forever? (14:54–15:57)

• Short-Term Prospects:
  • With current and pending restrictions, Chinese brands seem unlikely to enter soon.
• Long-Term Realities:
  • “Plenty of executives believe it's inevitable...there's sort of this resignation...that they're going to find a way somehow.” —Ryan Felton [15:10]
  • The situation depends on political shifts in the U.S.—both industry leaders and Chinese automakers are waiting to see how the environment develops.

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Notable Quotes & Memorable Moments

• On Early Perceptions:
  • "They just weren't viewed as serious contenders...I mean, BYD was trying to come over to the US as early as, you know, 2010. And there's a video of Elon Musk being asked at that time about BYD and he literally just bursts out laughing." —Ryan Felton [04:38]
• On Value and Appeal:
  • “It’s a total spaceship with a big rotating touchscreen, great driver interface...you get massage seats that recline and have this lovely leg rest. Amazing.”
    —Jessica Mendoza [06:51]
• Industry Alarm:
  • "They repeatedly described it as an existential threat to the domestic car industry." —Ryan Felton [12:10]
• Political Position:
  • “This is about hermetically sealing the US Market from predatory Chinese companies that are funded by the CCP…”
    —Senator Bernie Moreno [13:47]
• On Inevitability:
  • “I think there's sort of this resignation that's developed that...they're going to find a way somehow.”
    —Ryan Felton [15:10]

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Important Segment Timestamps

• [00:10] BYD’s launch in Mexico and the scale of Chinese auto sales nearby
• [04:41] U.S. industry’s initial reaction to Chinese carmakers
• [06:34] Standout features and prices of Chinese EVs
• [08:41] How the U.S. is keeping Chinese cars out (tariffs, security)
• [11:29] Data on growing U.S. consumer acceptance of Chinese cars
• [12:10] American carmakers’ existential fear
• [13:47] Senator Moreno’s call for legislative “hermetic sealing”
• [15:10] Discussion about the future—Will Chinese cars find a way in?

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Overall Tone

Informative and analytical, with flashes of humor and surprise at industry change. The discussion is marked by candor about both the impressive advances made by Chinese carmakers and the deep-seated anxieties now roiling the U.S. auto industry.

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Transcript

[Host/Announcer]

Bienvenidos a BYD king launch in 2024,

[Jessica Mendoza]

BYD threw a big event in Mexico. The Chinese electric vehicle company was celebrating one year in the country. Executives took the stage to announce a new model, and the CEO of BYD Mexico talked about a hybrid SUV that sold out in the country in just a few. He also set a big to sell 50,000 BYD cars in Mexico by the end of that year. These days, industry executives estimate that BYD is selling closer to 80,000 cars a year in Mexico, capturing a huge chunk of the country's EV market. Chinese vehicles overall make up a quarter of total car sales there. But if you're in the US you might have missed the hype. That's because here, all of these cars are effectively banned. Still, as more Chinese vehicles show up in America's backyard, more US Drivers are taking notice.

[Ryan Felton]

These cars aren't sold here right now, but what's clear is there is more interest.

[Jessica Mendoza]

Our colleague Ryan Felton covers the auto industry.

[Ryan Felton]

There's routinely sightings now of these cars in border towns. And so you just kind of have this small pocket of the US that is not just being exposed to these cars online, but like they could actually see them around town on American streets, even though they can't buy them.

[Jessica Mendoza]

Welcome to the Journal, our show about money, business and power. I'm Jessica Mendoza. It's Wednesday, June 3rd. Coming up on the show, will Chinese cars come to the US and what will it mean for the car industry?

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[Jessica Mendoza]

When China first entered the global car market back in the 80s, the US auto industry didn't think much of it. They saw it as a place to sell cars. But Chinese automakers weren't considered serious competition. And for decades that was the status quo.

[Ryan Felton]

That carried over into the 2000s when companies that were launched on their own started trying to think about coming to America. I remember I had a conversation with one former executive at a domestic automaker who, who said that when they showed up at the Detroit auto shows for the first time in the 2000s, they were, they were kind of just laughed at, more or less.

[Jessica Mendoza]

Why? What was that? Because of the designs of the cars?

[Ryan Felton]

Yeah, the designs, just the, the way that they drove. I mean it was just everything from the top down. They just weren't viewed as, as serious contenders. I mean, I, BYD was trying to come over to the US as, as early as, you know, 2010. And there's a video of, of Elon Musk being asked at that time about byd and he literally just bursts out laughing.

[Jessica Mendoza]

Why do you laugh?

[Ryan Felton]

Trying to compete.

[Jessica Mendoza]

Why do you laugh?

[Ryan Felton]

Have you seen their car?

[Jessica Mendoza]

I have seen their car, yes. In fact, at the Berkshire, I think

[Ryan Felton]

it's just fair to say they just weren't taken seriously at all.

[Jessica Mendoza]

But China kept investing in its auto industry and the designs and software have advanced quickly, turning a lot of skeptics into converts.

[Ryan Felton]

There's a common story that's shared by a lot of American auto execs who during the pandemic weren't traveling to China during the early years. And then when China reopened and held its first auto Show in like 2023, a lot of automakers went there and were just kind of blown away by what they saw. Like, it's just this, this period where everyone in China just kind of really accelerated and ramped up. And I think a lot of it ties back to the country's overall investment, prioritization of, of building up that supply chain.

[Jessica Mendoza]

These days there are more than 100 car brands in China. So the bigger players, brands like byd, Geely and Great Wall Motor, are taking their product overseas. These companies are exporting hundreds of thousands of carselectric, hybrid and gasto places like Europe, Southeast Asia, all over the world. Canada is also opening itself up to Chinese car imports. And the electric vehicles and hybrids have performed especially well, Elon Musk may have mocked them back in the day, but customers are raving about them now.

[Ryan Felton]

This is China's best selling small EV. And at $10,000 US I can understand why. And on a full charge and a full tank of gas, it can do

[Host/Announcer]

well over 650 miles.

[Ryan Felton]

It's a total spaceship with a big rotating touchscreen, great driver interface, you get

[Jessica Mendoza]

a head up display, you get massage seat seats that recline and have this lovely leg rest. Amazing.

[Ryan Felton]

A good example there was an SUV by the company Geely and it was just kind of, you know, gobsmacking when you see the kind of numbers that they're putting out, which is something like 800 miles of range in total, you know, something like well over 100 miles. That's just all electric.

[Jessica Mendoza]

That range goes beyond any plug in hybrid on sale in the US today.

[Ryan Felton]

And when you think about just what that means on a day to day for most people, I mean you could go several weeks without actually having to re up your car in any way.

[Jessica Mendoza]

And besides performance, are there other features these cars have that you maybe don't

[Ryan Felton]

see in the us There certainly are the kind of more outside of the box kind of technologies that we don't see. Like rotating center dashboards, you know, screens or like fridges in the back.

[Jessica Mendoza]

Like karaoke machines.

[Ryan Felton]

Yeah, like the karaoke thing is so common. I mean like, so there's these things that I think are atypical and you know, clearly not a part of our car market. But I think they have everything now. And you know, we talked to some executives who are competing with them in other countries and that was a big point that you know, I think came away from. It was it's not just about EVs, they're, they're competing on everything Now.

[Jessica Mendoza]

What's maybe most attractive to buyers when it comes to China's cars is the price tag.

[Ryan Felton]

Simply put, it's like they're, they're priced aggressively and in many cases very affordably. Wherever China's automakers have gone around the world as of late, they've really sort of immediately gobbled up market share and won over locals where they've gone, which is pretty much everywhere else but America at this point.

[Jessica Mendoza]

And US car companies and the government want to keep it that way. Would you say this is the biggest threat they've seen? What in a generation?

[Ryan Felton]

Yeah, I mean, I don't think it's

[Jessica Mendoza]

any question what efforts to keep Chinese cars out of the US look like is after the break. Chinese cars are not explicitly banned in the U.S. but there are a couple of reasons why you don't see them here. First of all, there are sky high tariffs in place. Those can get to be above 100%, making them just too expensive to sell here. And then there are national security concerns. The US Government has prohibited the software inside the cars, basically comparing it to a Trojan horse.

[Ryan Felton]

It's been an overriding theme for the last few years since the Chinese car industry really kind of took off and resulted in rules that are pretty stringent and stipulate that you can't have any Chinese, what they call connected vehicle software. And that's essentially anything in your car that's talking to the cloud that can't be made by a Chinese connected entity. And then also in a few years, you can't have certain types of hardware in your car that come from China. And that's all been tied to national security.

[Jessica Mendoza]

So you can't buy these cars here. But that hasn't stopped them from appearing on some American roads. As part of his reporting, Ryan went down to Texas and met up with a BYD owner named Dario Araiza. He's a dual US Mexico citizen who lives in Mexico near the border and regularly drives his BYD into Texas. Ryan says that Dario, like many others he talked to, purchased his Chinese car for one big reason, price.

[Ryan Felton]

When he said he was going to look for a car, he had a particular price point in mind which is in the low to mid-30s, $30,000. And he said it was just no contest when he actually saw the vehicle compared to others at that price point. It's a plug in hybrid, which means it gets all electric range for driving, plus has a gas motor as well. And there really isn't too many at the price they bought it, which was close to $30,000. So he said it was just, it was a no brainer, particularly because of the price.

[Jessica Mendoza]

And in your reporting, what did you learn about the appetite from American customers for Chinese cars? Are there a lot of like US based Darios out there?

[Ryan Felton]

You know, one of the biggest surveys of car owners that's done every year they will ask something like 250,000 people, would you buy your next car that's made in X country? And with that number has steadily gone up, something like 30% of car buyers would consider buying a car from China now, which I think is kind of extraordinary in this environment where you have pretty much everyone from industry to lawmakers loudly saying these cars shouldn't be let

[Jessica Mendoza]

into the US and that makes US car companies quite Worried what is at stake here, particularly for the American car industry?

[Ryan Felton]

Yeah, I mean, it's. If you take the car maker's point of view, it's everything. They repeatedly described it as an existential threat to the domestic car industry.

[Jessica Mendoza]

These concerns have bubbled up from a lot of brands, from American stalwarts like Ford to importers like Hyundai. They feel like they would have a hard time competing on price if Chinese cars entered the US Market. If I wanted to buy a new car here in the US Today, how much should I expect to spend, at minimum?

[Ryan Felton]

So there's some that get listed for, you know, 21, $22,000, and those are the very compact SUV type cars. If you're looking for something like you're a family, that you need something bigger, I mean, you're immediately going up to. Closer to, you know, 30,000 on up and. But the average transaction today is, you know, $50,000, and that's been pretty much consistent for the last few years now.

[Jessica Mendoza]

Domestic car executives say there are several reasons why they'd struggle to compete with China's aggressively low car prices. Things like the country's cheaper labor, powerful government subsidies, and efficient supply chain. Even as Americans show more interest in buying Chinese cars, US Lawmakers are pushing for more restrictions. A new bill called the Connected Vehicle Security act was recently introduced in the US Senate. Here's Senator Bernie Moreno, a Republican from Ohio, one of the bill's co sponsors.

[Ryan Felton]

This is about hermetically sealing the US Market from predatory Chinese companies that are funded by the CCP with one simple goal, which is to destroy our auto sector, which is about 10% of our GDP.

[Jessica Mendoza]

The bill would make it illegal to manufacture Chinese cars in the U.S. it would also mean American car companies couldn't pursue joint ventures with Chinese automakers, and Chinese car companies that own US Brands would have to divest themselves of those brands.

[Ryan Felton]

A lot of the automakers immediately came out and said that they were supportive of the policy move. And that's not a surprise, really, at this point, because you have so many companies now that have just been loudly saying for the past year that China coming here in some capacity would be unfair, given some of the points I mentioned about subsidies, for example. But I think part of that fear, though, is driven by the fact that these companies know how to make a really good car now. They feel like it would be an unfair competition, but these companies are all very impressed with the cars as well.

[Jessica Mendoza]

So, Ryan, the US Government is trying to safeguard American carmakers with these policies, but how realistic is it to expect that they can keep Chinese cars out of the US Indefinitely. I mean, is it inevitable that these cars will be sold here?

[Ryan Felton]

I can't see it happening soon, especially if this legislation picks up steam, because the fact that it would also ban the manufacturing of cars, that really would sort of be a hindrance. That said, plenty of executives believe it's inevitable. The fact, I think that you have these companies still expressing a desire to come here, even with all this sort of opposition that's, that's been building. I, I think that there's sort of this resignation that's, that's developed that it's going to, they're going to find a way somehow. I think it's just sort of waiting to see that the dust settles politically.

[Jessica Mendoza]

That's all for today. Wednesday, June 3 the Journal is a co production of Spotify and the Wall Street Journal. If you like our show, follow us on Spotify or wherever you get your podcasts. We're out every weekday afternoon. Thanks for listening. See you tomorrow.

[Host/Announcer]

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