BYD will challenge tariffs in the United States that effectively bar the automaker – and other brands from China – from selling cars in the world’s second-largest market.
Accordingly CarNewsChinawhich quotes reports from Caijing In China, four US-based BYD subsidiaries have filed a lawsuit against the federal government in the US Court of International Trade (CIT).
If successful, it could open the U.S., second only to China with about 16 million new vehicles sold annually, not only to BYD but also to other Chinese automakers currently locked out of the market by tariffs and other laws.
The lawsuit challenges nine executive orders issued since February 2025 – including tariffs on imports from Mexico and Canada that have a major impact on the automotive industry.
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The U.S. government introduced new automobile-specific tariffs in April 2025 and added tariffs on auto parts the following month. There were also so-called “reciprocal” tariffs, which are also challenged in the BYD lawsuit, as well as later “retaliatory tariffs”.
The current standard US import tariff on an electric vehicle made in China is 127.5 percent, compared to zero in Australia because we have a free trade agreement (FTA) with China.
BYD is seeking permanent injunctions against the tariffs, saying the International Emergency Economic Powers Act (IEEPA) under which they were imposed does not provide any legal authority to impose tariffs.
Therefore, BYD argues, the tariffs are legally ineffective.
In mid-2025, BYD paused plans for a production facility in Mexico due to uncertainty caused by several changes in tariffs, which it said cost US automaker Ford an additional US$2 billion (AUD2.83 billion) in 2025.
Ford said late policy changes in December 2025 resulted in tariff costs that were $US900 million ($A1.3 billion) higher than expected at the start of the year, while U.S. rival General Motors said its entire $US1.68 billion ($A2.37 billion) loss between April and June 2025 was due to tariffs.
BYD’s lawsuit also questions the validity of tariffs on India and Brazil, as the automaker operates assembly plants in both countries.
A “stay order” was issued for the case, filed on January 26, 2026, pending the outcome of a New York wine importer making a similar argument.
The New York wine importer has already won before the CIT and the Federal Appeals Court, which found that the US President does not have the authority to impose tariffs under the IEEPA – just as BYD argues in its case.
The US government has appealed the outcome of this case. The hearing is currently scheduled for September 30, 2026. This means that the outcome of the BYD case will not be announced until the following month at the earliest.
In 2024, then US President Joe Biden decided to ban software and hardware from China in cars due to “safety concerns,” an issue recently raised in Canada after the country reduced tariffs to 6.1 percent from 100 percent in 2024.
Accordingly Automotive NewsOntario Premier Doug Ford called the move allowing up to 49,000 Chinese-made cars into Canada annually a mistake, with some commentators suggesting Canada will serve as a “back door” to the restricted U.S. market.
“I call it the spy car they bring,” Mr. Ford said, according to the deposition Automotive News.
“If you pick up your cell phone, the Chinese will listen – and I’m not making this up… They will listen to your phone conversation.”
Australia’s privacy watchdog said yesterday it was investigating two car manufacturers over possible breaches of data protection law, but did not name the brands involved.
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