The high wall of the United States is crashing down on its own automotive industry.

Recently, the U.S. automotive industry has been thrown into a fresh panic. The Auto Innovation Alliance (AAI), which represents major automakers including Ford, General Motors and Stellantis, is worried that upcoming political shifts may derail their plans, so it is urging the U.S. Congress to pass a bipartisan bill during next week's short-term session to impose permanent restrictions on Chinese automobile imports.

In fact, this bill has already seen progress previously. This July, the bill was passed in the Senate Committee on Commerce, Science and Transportation, and the House version has more than 100 co-sponsors. The bill proposes to restrict the import, manufacturing and sale of connected vehicles, software and hardware related to foreign entities including China. Restrictions on vehicles and software will take effect in 2027, and restrictions on hardware will take effect in 2030.

However, some lawmakers have objections to the scope of application of the 15% Chinese capital ownership threshold in the bill, worrying that the rules will affect non-Chinese brands such as Mercedes-Benz, which holds nearly 20% Chinese-owned shares. The fast-track approval procedure for the bill was postponed from September to November.

Now some people are worried that if the Democratic Party of the United States wins control of the legislature, the bill may not be passed before the end of the December session of Congress. The U.S. market currently maintains high tariffs on Chinese electric vehicles, and the current regulatory rules also impose constraints on the sale of China-related connected vehicles in the United States.

That is to say, the subsequent voting result of the bill will determine the access rules of the U.S. automotive market in the future and the competition landscape of major automakers.

The window for catching up will not stay open forever

Facing the expansion of Chinese automotive brands in the global market, the response idea of the U.S. automotive industry in the past few years is to keep Chinese automobiles out by relying on trade barriers and regulatory rules, rather than participating in competition through technological iteration and efficiency improvement.

In 2024, Biden imposed an additional 100% tariff on Chinese electric vehicles. After Trump took office, he abolished the previous emission regulations and electric vehicle subsidy policies, which implicitly encouraged automakers to continue to produce large-displacement fuel vehicles at the regulatory level. At the same time, he pushed Congress to review the Connected Vehicle Safety Act of 2026, trying to restrict connected vehicles, software and hardware with Chinese background from entering the U.S. market with data security requirements.

Industry insiders said that ordinary American consumers are directly affected. At present, the average price of new cars in the U.S. market is about 50,000 US dollars, while the selling price of Chinese electric and hybrid models in the Mexican market is usually only half of this price, and the selling price in other emerging markets is even lower.

A large number of American consumers even drive across the U.S.-Mexico border to buy Chinese-made cars in Mexico and then drive them back to the United States, in order to buy more cost-effective models.

Related reports from The Wall Street Journal confirmed this phenomenon. A media practitioner pointed out in a comment that this set of protection policies deprives most American consumers of the right to buy cost-effective automobiles around the world, and eventually makes Americans spend more money to buy products with worse performance and configurations.

The deeper impact falls on the U.S. automotive industry itself. Due to the long-term lack of external competition, Detroit automakers have weakened their motivation to reduce costs, slowed down technological iteration and product optimization, and the gap with the global first echelon is widening.

Now the effect of this strategy of isolating Chinese automobiles from the U.S. market is limited. Analysts from Cox Automotive said that it is only a matter of time before Chinese automakers enter the U.S. market. They are very patient and have completed the preliminary layout long ago.

For example, Chery publicly stated that it will enter the U.S. market at the "right time", and the expected window is two or three years later. Geely has a complete vehicle factory in South Carolina, the United States, through its Volvo brand, which can use existing production capacity to avoid tariff restrictions. Subsequent brands such as Zeekr and Lynk & Co can also enter the U.S. market based on this foundation. Many Chinese automakers have set up design and R&D centers in the United States to build local teams in advance.

The surrounding markets are also changing. In the first half of 2026, Chinese-made automobiles accounted for 17% of automobile deliveries in Mexico, a year-on-year increase of 30%. GAC Group is about to launch complete vehicle assembly business in Mexico, and both BYD and Geely are evaluating building factories in Mexico. The trade agreement recently signed by Canada allows the import of 49,000 Chinese automobiles per year at extremely low tariffs. BYD is also considering setting up a complete vehicle factory in Canada to form a siege of the U.S. market from the North American supply chain side.

What makes Detroit automakers more anxious is the uncertainty at the U.S. policy level. Trump said in January this year that if Chinese automobile companies are willing to build factories on U.S. soil and provide jobs, he welcomes such investments. This statement directly triggered collective panic among local automakers.

In response, Ford President Jim Farley publicly warned that fully opening up to Chinese automakers would be a "devastating" impact. Later, he also put forward a compromise solution, requiring Chinese automakers entering the U.S. market to adopt the form of joint ventures controlled by U.S. companies.

Contrary to the United States, those international automotive brands that have fierce competition with Chinese automakers in the European market have been forced to complete the upgrading of their own electrification technologies. These brands also intend to enter the highly profitable U.S. market to further change the competition landscape.

More and more industry comments point out that relying solely on protectionist barriers cannot maintain the comfort zone of Detroit automakers forever. The path that can really help the U.S. automotive industry stabilize its global position is to launch coherent industrial support policies, coordinate regional trade rules with Canada and Mexico, make up for the gap in blue-collar skilled worker training, and solve the problem of shortage of skilled talents in the industry.

If we continue to adhere to short-sighted protection policies and let automakers indulge in the short-term profits of large-displacement fuel vehicles, the U.S. automobile industry will only fall behind again in the global electrification wave, and the former glory of Detroit will also become a historical memory.

Detroit automakers are not necessarily safe

Judging from industry data and corporate financial reports in recent years, the global market positions of General Motors, Ford and Stellantis, the three major traditional U.S. automakers, have continued to decline. The automobile industry, which once supported hundreds of thousands of jobs in the U.S. Midwest and accounted for a considerable proportion of GDP, has now been left behind.

Data shows that the global share of Chinese automobiles in the whole year of 2025 was 35.6%, compared with only 14% in 2020. During the same period, the global market share of the three major U.S. automakers shrank to 12%, which is in sharp contrast to their industry status more than half a century ago. In 1950, three-quarters of automobiles around the world were produced in the United States, and now this proportion has dropped to about one-eighth.

Specifically for the performance of various regional markets, the decline of Detroit automakers is reflected in almost every major battlefield. In Europe, the number of new car registrations of Chinese brands in the last quarter exceeded that of mainstream Japanese brands for the first time. General Motors withdrew from the European market as early as 2017 due to long-term losses, and sold the Opel brand to PSA Group, which later merged into Stellantis. Ford's market share in Europe has declined significantly. It previously stopped production of small cars, and many electric vehicles launched later also failed to gain market recognition.

In the Chinese market, General Motors' market share has dropped by nearly half in the past ten years, and Ford's share has shrunk by two-thirds. American brands that once occupied an important position in the Chinese market have been completely squeezed to the edge by the rapidly rising local independent brands.

It should be noted that General Motors ranked first in the world with annual sales of 8.4 million units in 2004, but its total sales last year were only 6.2 million units, falling to fourth in the world. Ford also fell from third in the world that year to seventh. Even in the United States itself, the combined market share of the three major automakers has dropped from more than 90% to about 40%. Stellantis' total U.S. sales last year were only 1.3 million units, less than half of that in 2004.

Analysts from Jefferies Bank pointed out in a research report that the three major U.S. auto giants have been shrinking their business in recent years, and have bet almost all their resources on large pickup trucks and SUVs with high profits in the North American market. These models have high profits at present, but they are heavily polluting, with high fuel and maintenance costs, and the market size is continuing to shrink.

Including these automakers, they also misjudged the market trend before. In particular, General Motors failed to realize the lasting market potential of hybrid models for a long time, and invested a lot of resources in R&D of pure electric vehicles, which instead allowed competitors such as Toyota to gain advantages with hybrid technology.

The more core contradiction lies in the business operation level of the enterprises. The three giants have not invested sufficient profits in the R&D of next-generation models, cost control and product reliability improvement. Instead, they have continuously delivered benefits to Wall Street shareholders, and implemented large-scale dividend distribution and stock repurchase plans.

For example, after completing a $6 billion stock repurchase, General Motors announced a new repurchase plan as high as $20 billion, which caused dissatisfaction among the United Auto Workers. UAW President Shawn Fain publicly called it "legalized mass plunder" and said the union was ready to strike again when the 2028 labor contract expires. Stellantis, which previously stabilized investor confidence by paying dividends, also suspended dividend payments due to financial difficulties.

In addition, the repeated changes in U.S. automotive industrial policies in the past few years have further amplified the risks of Detroit automakers. Trump suddenly terminated the electric vehicle support policy, resulting in a total of more than $50 billion in asset write-downs for Ford, General Motors and Stellantis. Ford wrote down nearly $20 billion, Stellantis $26 billion, and General Motors $8 billion. The pure electric vehicle plans that the three companies had previously invested a lot of resources in building were forced to shrink.

Ford stopped production of the F-150 Lightning electric pickup, a best-selling model that it had high hopes for. General Motors and Stellantis also gave up launching electric versions of large pickup trucks. Coupled with the additional tariffs imposed by Trump on trading partners, the North American automotive supply chain was disrupted. The subsequently renegotiated trade rules raised the requirement for the proportion of local auto parts, and every policy change caused Detroit automakers to lose billions of dollars additionally.

In addition, the continuously rising fuel prices and inflationary pressures have pushed up the production and operation costs of automakers. Under multiple factors, Detroit's traditional advantageous track seems stable, but in fact it has lost its first-mover advantage in the global electrification transformation, and the decline of long-term competitiveness has become the industry consensus.

Chicago Magazine wrote in a report that the United States urgently needs to wake up and use its economic strength to support advanced industries so that they will not be marginalized on the global stage. Stupid approaches do not work. It is time for the United States to think seriously about the future of its industries.

This article is from the WeChat Official Account "Auto Community" (ID: iAUTO2010), written by Yang Jing, and published by 36Kr with authorization.