Scott Bessent says China resisted G20 trade push as U.S. tariffs redirect Chinese cars to overseas markets

China resisted Bessent’s G20 push

On Sept. 1, 2026, Treasury Secretary Scott Bessent said every G20 participant except China backed action against nonmarket policies that encourage excessive exports and persistent trade imbalances.

Bessent said stronger U.S. tariffs had redirected Chinese products toward other countries. American policy already restricts many Chinese-built vehicles from entering U.S. showrooms.

Chinese automakers are competing more heavily in Europe and other overseas markets. American brands selling vehicles in those regions face Chinese competitors outside the protected U.S. market.

Bessent explains the export pressure

Two days earlier, Bessent explained why he wanted coordinated action. He argued that weak Chinese demand was encouraging factories to rely more heavily on customers outside China.

“The world cannot have a China with a $1.2 trillion trade surplus,” Bessent said. The U.S. goods deficit with China reached $73.9 billion during 2026’s first half.

That deficit was one-third lower than a year earlier. Bessent linked the change to U.S. tariffs that redirected more Chinese goods toward Europe and Latin America.

China rejects Bessent’s argument

China answered the G20 criticism on Sept. 2, 2026. People’s Bank of China Governor Pan Gongsheng said China had never deliberately pursued a large trade surplus.

Pan said Beijing remained committed to expanding domestic demand and maintaining economic openness. His response directly challenged Bessent’s argument about China relying too heavily on foreign buyers.

China is the world’s largest vehicle market. Slower domestic demand can make overseas customers more important for Chinese vehicle manufacturers seeking additional sales.

Chinese EVs face a 100% U.S. tariff

U.S. policy already places a major price barrier on Chinese electric vehicles. The government finalized a 100% Section 301 tariff on Chinese EV imports during September 2024.

The higher rate took effect Sept. 27, 2024. It is added to normal import duties, making it much harder for China to build electric vehicles and sell them competitively through U.S. dealerships.

BYD and other Chinese EV brands remain largely absent from American dealer lots, even as those companies continue to expand their sales in overseas markets.

Connected vehicle rules add another wall

Tariffs are not the only U.S. barrier facing Chinese vehicles. The Commerce Department finalized its Connected Vehicle Rule on Jan. 14, 2025, citing national security concerns.

The rule covers passenger vehicles weighing less than 10,001 pounds when certain software or connectivity technology has sufficient links to China or Russia under federal definitions.

Software restrictions begin with 2027 model year vehicles. The rules create another obstacle for Chinese automakers seeking U.S. sales, even when a vehicle could overcome import tariffs.

Ford moves Lincoln production home

On Aug. 12, 2026, Ford CEO Jim Farley announced plans to move some Lincoln production from China to the United States beginning in 2030.

Ford said the China-built Lincoln Nautilus faced a 52.5% U.S. tariff. The company had not yet identified the U.S. plant for the future production shift.

“We made this decision as soon as the policy of the administration was set,” Farley said. Ford already builds Lincoln SUVs at factories in Kentucky and Illinois.

China car sales fell as exports jumped

China’s July 2026 passenger vehicle sales fell 21.1% from a year earlier to 1.47 million vehicles as domestic demand remained weak.

Vehicle exports moved in the opposite direction during July. Chinese shipments abroad increased by 88.2% from the previous year to 923,000 vehicles during the month.

Exports of electric vehicles and plug-in hybrids rose 147.8%. Foreign shipments expanded while China’s domestic passenger vehicle market recorded another year-over-year decline.

BYD sends more vehicles overseas

BYD sold 440,293 vehicles worldwide during August 2026. That represented a 17.8% increase from the same month in 2025.

Its overseas shipments reached 189,466 vehicles during August. That total was 134.5% higher than a year earlier as foreign sales became a larger part of BYD’s business.

Europe, Southeast Asia, and Brazil became important markets. BYD’s electric vehicles and plug-in hybrids compete with models from American automakers in several overseas markets.

Tesla also exports from Shanghai

Tesla’s Shanghai factory sold 86,166 China-made Model 3 and Model Y vehicles in August 2026, including units sold locally and those shipped abroad. August volume was 3.6% higher than a year earlier but 7.9% lower than July. The Shanghai plant serves China and several overseas markets.

Exports accounted for more than half of Shanghai’s production in the second quarter. Tesla also faced increasing competition from Chinese EV manufacturers in its home market.

Chinese brands gain ground in Europe

Chinese automakers held about 16% of Europe’s passenger vehicle market during the first quarter of 2026, according to Counterpoint Research data cited by Reuters.

Four years earlier, Chinese brands held about 3% of the market. Registration data showed gains against European, Korean, and U.S. competitors selling vehicles there.

Chinese companies also accounted for nearly one quarter of European EV shipments. Several manufacturers are adding local factories in Europe to support future vehicle sales.

GM also exports vehicles from China

In August 2026, General Motors extended its joint venture with state-owned SAIC for another 20 years, continuing a long-standing manufacturing partnership in China.

The venture is equally owned by GM and SAIC. GM plans to develop more vehicles in China while exporting selected products to customers in other regions.

China-developed Buick Electra vehicles are planned for several foreign markets. Chevrolet vehicles also continue to be exported from China through GM’s separate joint venture with SAIC and Wuling.

Ford prepares for Chinese competition

On Aug. 4, 2026, Ford CEO Jim Farley told employees that Chinese automakers could enter the American market within five to 10 years.

Ford is developing lower-cost electric vehicles to compete with Chinese rivals on production costs and efficiency. The company has reorganized parts of its EV development work.

Executive Chair Bill Ford has also warned that Chinese competitors could eventually enter the U.S. market. Ford continues preparing products for that possibility.

Jim Farley admits he has ‘trust issues’ with Tesla, endorses Waymo instead, and highlights another competitive concern at Ford as its leadership weighs which autonomous-driving technologies it considers more credible.

China builds a wider overseas footprint

China exported 8.32 million vehicles during 2025 to more than 200 countries and regions, according to official figures cited by Reuters.

Chinese companies had also invested in auto manufacturing projects across more than 80 foreign markets. Those operations place production closer to overseas buyers and dealers.

On Sept. 1, 2026, Chinese regulators issued new overseas guidance for automakers covering pricing, compliance, and local legal requirements as international vehicle operations continued expanding.

Trump-era policies put U.S. carmakers behind China in the EV race examines how policy choices and market conditions have shaped the widening competitive gap between U.S. and Chinese EV manufacturers.

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This slideshow was made with AI assistance and human editing.