US President Donald Trump is scheduled to arrive in Beijing on May 14 for a two-day summit with Chinese President Xi Jinping, where trade relations will be among the main topics of the agenda.
Trump had initially planned to visit China in late March. However, the trip was postponed after the Iran conflict escalated.
The visit comes at a moment when Chinese automakers are months away from entering the North American market.
Canada struck a trade deal with Beijing in January, lowering tariffs on Chinese-built EVs from 100% to 6.1% under a quota of 49,000 vehicles per year — with a ramp-up to 70,000 by 2030.
The agreement marked a decisive shift from Ottawa toward Beijing and away from Washington on EV trade policy, after Canada had originally imposed the 100% surtax in lockstep with the Biden administration in late 2024.
The first tranche of 24,500 import permits opened on March 1 and Chinese giants BYD, Chery, and Geely Auto are all preparing for Canadian market entry by year-end.
Meanwhile, Chinese-built vehicles have already started appearing on American roads through Mexico.
BYD vehicles with Mexican license plates have been spotted in Texas and California through a customs loophole that allows Mexican residents to drive their foreign-registered vehicles across the border — despite the tight rules on Chinese vehicles’ connectivity in the US.
Tariffs
The barriers keeping Chinese EVs out of the US have been assembled across two administrations.
Trump’s first-term administration applied a 25% Section 301 tariff on Chinese vehicles and auto parts starting in 2018.
Under Biden’s presidency, the duties were maintained and, in May 2024, quadrupled from 25% to 100% under the same authority.
Upon returning to office in 2025, Trump preserved Biden’s 100% EV tariff and added a 25% Section 232 national security tariff on all imported vehicles and auto parts.
The combined tariff burden on a Chinese-manufactured EV entering the US exceeded 125%, making direct imports commercially unviable.
The US Supreme Court has recently struck down Trump’s use of the International Emergency Economic Powers Act (IEEPA) as a legal basis for country-specific tariffs, invalidating the sweeping duties imposed under that authority.
The ruling did not touch the Section 301 tariffs on Chinese EVs, however.
Trump replaced the lost IEEPA tariffs with a 10% global tariff under Section 122 of the Trade Act of 1974, meaning Chinese electric vehicles currently pay a combined effective rate exceeding 110%.
Last month, during a Fox News phone interview, Trump called the 100% tariff on Chinese cars effective, saying it was “destroying Europe” because European automakers were losing market share to Chinese rivals that could not enter the US.
“We don’t have any Chinese cars in our country because they would have destroyed General Motors, Ford, they would have destroyed these companies if they did it,” the US President said.
A day later, Trump addressed the possibility of imposing an extra 50% tariff on China amid the prospect of Chinese military exports to Iran.
“I hear news reports about China giving [Iran] the shoulder missiles… anti-aircraft missile,” Trump said. “I doubt they would do that… but if we catch them doing that, they get a 50% tariff, which is a staggering amount.”
China’s Rare Earth Metals
The tariff escalation last year did not go unanswered.
In response to the steep tariffs imposed last April, Beijing imposed export controls on seven rare earth elements.
A broader second wave followed in October 2025, adding further elements, processing technologies and — for the first time — extraterritorial provisions requiring export licenses for products made outside China using Chinese-origin materials or technologies.
The restrictions disrupted EV and defense supply chains globally.
China produces more than 90% of the world’s processed rare earths and rare earth magnets — materials critical for permanent magnet motors used in virtually every electric vehicle on the road.
Rivian CEO RJ Scaringe warned last year that “trade restrictions and what we’re seeing in terms of rare earth metals out of China, that’s a real challenge for electric vehicles,” noting that processing of the materials “happens almost exclusively in China.”
The Trump-Xi summit in Busan, South Korea in October 2025 produced a temporary truce.
China agreed to issue general licenses suspending the controls until November 2026 — making the May 14 meeting a potential inflection point for the EV supply chain.
Connectivity Rules
Beyond tariffs, a connected vehicle rule finalized by the Biden administration created an independent regulatory wall.
The regulation prohibits vehicles containing Chinese- or Russian-linked software in their connectivity and automated driving systems from being imported or sold in the US, with software restrictions taking effect for model year 2027 and hardware restrictions for model year 2030.
It also prohibits Chinese-owned manufacturers from selling connected vehicles in the country even if they are produced domestically — a provision that undercuts Trump’s own January suggestion that Chinese automakers could build factories in the US.
US Trade Representative Jamieson Greer confirmed in April that the administration has no plans to alter the ban.
“Those rules are effective,” Greer said, adding that “it seems like it would probably be difficult for certain countries to establish new production here, given those sets of rules.”
Canada Opens Door to China
Canada’s agreement with Beijing has added a new dimension to the pressure on Washington.
The deal replaced the 100% surtax with a 6.1% most-favored-nation tariff under a managed quota — in exchange, China lowered retaliatory tariffs on Canadian canola seed and removed anti-discrimination tariffs on Canadian lobster, crab and peas.
Tesla was the first company to exploit the deal, shipping Shanghai-built Model 3 sedans to Canada at C$39,490.
Canada is now developing data protection rules for connected vehicles specifically in response to concerns about Chinese-built EVs.
The Conservative opposition has pledged to scrap the quota entirely and ban Chinese-linked vehicle software to align with US cybersecurity rules.
The deal has widened a divide between the North American neighbors on China policy.
More than half of Canadians surveyed said a vehicle’s Chinese origin would not affect their buying decision, according to Nanos Research Group polling, while a majority of American EV buyers expressed unfavorable views of Chinese car brands.
Congress Pressures Trump
On Capitol Hill, lawmakers have been moving to go further than any existing measure.
Senators Bernie Moreno (R-Ohio) and Elissa Slotkin (D-Michigan) introduced the Connected Vehicle Security Act of 2026 on April 29, which would ban the importation, manufacture, sale and resale of vehicles and connected components linked to China or other foreign adversaries.
The bill has backing from the UAW, General Motors, Ford and Honda.
Moreno — who previously accused Waymo of bypassing the connected vehicles rule by importing Geely-built robotaxis — said the legislation would “hermetically seal” the US market from the Chinese auto industry.
Slotkin described Chinese vehicles as “surveillance packages on wheels.”
The bill followed letters from three Democratic senators — Tammy Baldwin, Slotkin and Chuck Schumer — who warned that allowing Chinese automakers into the US would create an economic advantage that American manufacturers could not overcome.
More than 70 House Democrats led by Representatives Debbie Dingell and Ro Khanna separately urged Trump not to permit Chinese automakers to build or sell vehicles in the country.
The bipartisan push contrasts with some of Trump’s own signals.
At the Detroit Economic Club in January, the president said that “if they [Chinese companies] want to come in and build the plant and hire you and hire your friends and your neighbors, that’s great, I love that.”
The connected vehicle rule — which his own trade representative has confirmed will remain in place — would prevent that from happening in practice.
Outlook
Trump’s visit will be the first by a sitting US president to China since his own 2017 trip.
US Trade Representative Jamieson Greer has described the current tariff regime as a “stable situation” with China and said the administration is “not looking for massive confrontation.”
He has also publicly supported a Board of Trade concept — first introduced in Paris earlier this year — which could focus on expanding trade in less sensitive product categories and potentially reducing tariffs on those goods.
Whether electric vehicles would fall within the scope of such managed trade arrangements remains unclear.
The proposed Board of Trade could also face questions over whether it would cover rare earth minerals, the leverage China has been deploying since last year.
For the EV industry, the summit arrives at the most consequential moment yet for the US.
Late last year, the federal consumer credit for EV purchases and leasing contracts ended, leading sales to jump ahead of the incentive’s termination and to plunge immediately after.
Automakers in the US have stepped back from EV plans, halted models, and recorded multi-billion dollar losses tied to the restructuring of their businesses.
