UBS analyst Joseph Spak asked clients on Sunday: Will there be Chinese cars in the US?

Spak pointed to comments from President Trump last week at the Detroit Economic Club, in which he said, “If they want to come in and build a plant and hire you and hire your friends and your neighbors, that’s great. I love that. Let China come in, let Japan come in. They are. And they’ll be building plants, but they’re using our labor.”

Trump’s comments come after Chinese automaker Geely stated at CES in Las Vegas that it could make a major announcement about a U.S. expansion within the next 24 to 36 months.

“The big question for us is when and where we will go to the U.S.A.,” Ash Sutcliffe, Geely’s global communications chief, said in an interview last week at the Autoline Network at CES.

This also follows Canada’s decision last week to allow up to 49,000 Chinese EVs per year at a low tariff rate. U.S. Trade Representative Jamieson Greer said the decision is “problematic for Canada.”

“There’s a reason why we don’t sell a lot of Chinese cars in the ‌United States. It’s because we have tariffs ‌to protect American auto workers and Americans from those vehicles,” Greer told CNBC on Friday.

But Trump’s comments suggest that if Geely or BYD Motors were to announce new manufacturing plants in the US, their products would avoid tariffs and be competitively priced with domestic car brands.

UBS analyst Spak offered his team’s thoughts on Chinese EVs in the US market:

Currently, there is a 100% tariff on Chinese EV imports. But of course, this wouldn’t be an issue if vehicles are built here. The bigger issue, in our view, is that the US bans Chinese software in vehicles starting in 2027, and then hardware in 2029. We believe that even for Chinese vehicles built in the US, they would want to leverage their software and hardware development.

Investors point to the recent rapid rise of Chinese vehicles in Europe, with their December share hitting 18% in the UK and 12% in Spain. For the year, Chinese share in the UK was up to 9.7% (aided by China owned MG brand which has UK heritage) from 4.8% in 2024, Italy 8.1% from 4.7%, Germany remains lower at 2.5%. But of course, this large inflection was aided by imports. And China exports grew meaningfully in 2025, to >1mm units, as they looked for global growth especially as domestic demand slowed and amid high domestic competition. In the US, the Chinese don’t have the ability to test the waters or see early gains given exports to the US are tougher.

Building factories, supplier parks, dealerships, distribution networks, and service would take some time (though many dealers we have spoken to have indicated they would welcome selling them). Rental/fleet seems like a way the Chinese OEMs could first start to get a foothold in the US and test out the market.

So, as has been our belief for a while (we wrote this in 2023), it is likely only a matter of time before the Chinese automakers are in the US, a sentiment others such as Ford CEO Jim Farley have echoed. From Ford’s 2Q25 earnings call: “We really see not the global OEMs as a competitive set for our next generation of EVs. We see the Chinese, companies like Geely and BYD.”

However, because of policy, the US OEMs likely still have a protected window for a number of years. Moreover, in our view, if/when the Chinese come, they are less likely to compete with the D3 bread and butter (and major profit driver) of large pickup trucks and SUVs. These segments have very brand loyal customers and also, for now, are less likely to be electric. Thus, smaller cars and small/midsize CUVs are more likely at risk. These are already competitive segments but also areas where Japanese/Korean brands tend to be more successful as F/GM have pulled out of many of these areas. Chinese autos in the US would also be a headwind for TSLA, RIVN. Further, China seems to be a topic US voters are more aligned on than not, so we wouldn’t expect the administration to move much on China auto investment before the mid-term elections.

And of course, there are still the political considerations as China remains a hot button topic. For instance, in response to a WSJ article which said Ford could buy batteries from BYD for hybrids for Ford factories outside the US, White House trade adviser Peter Navarro posted on X, “So @ford wants to simultaneously prop up a Chinese competitor’s supply chain and make it more vulnerable…?” Recall, Waymo recently changed the branding of their Zeekr based robo-taxi to Ojai (“ohhi”).

What about the US “back doors”? Canada just struck a deal with China to allow up to 49k Chinese EVs at a 6.1% tariff (had been a 100% tariff), and Canadian PM Carney indicated he expected the agreement would drive considerable Chinese investment into Canada’s auto sector. This is likely to draw scrutiny from the US as they review/renegotiate USMCA, where rhetoric has become more adversarial. During President Trump’s recent visit to Detroit, he called USMCA “irrelevant” and that Canada wants it but the US doesn’t need it. However, given the complexity of current supply chains, this would cause challenges for the US auto industry. We also believe that as part of the US discussions with Mexico, the US is seeking ways to limit Chinese auto investment in Mexico. That said, we believe this administration may be thinking one way to close the back doors is to eventually open the front door.

Also, we found this article that the first “dark” factory could open by 2030 (our understanding is that the Xiaomi factory is already very highly automated) interesting, since if the Chinese do come to the US, it may also be a headwind to President Trump’s stance that they will use “our labor” (though we believe US OEMs are also highly likely to continue to automate their facilities).

Key to the future of GM and F is what they do with strong profits during this period. We highlight F is still investing in their UEV platform, and GM CEO Mary Barra recently said EVs are still the end game.

Finally for suppliers, while they may claim this is an opportunity for new business, at a steady state, we believe this is at best case a neutral outcome (win with Chinese OEM replaces win with existing customer) with risk skewed to the downside as it could be a share loss, the win with the Chinese OEM could be lower content, and Chinese suppliers could also invest in the US (again political issues, but we are assuming a case where the Chinese OEMs come). That said, they may also have more time if we are right that initial Chinese vehicles in the US take share from Asian OEMs where the NA supply base tends to have less exposure.

To sum up, with Chinese EVs rapidly gaining market share in Europe and beginning to appear on roads in Canada and Mexico, it is likely only a matter of time before they reach the US. Trump suggested that building factories in the US could be their pathway to US consumers, a development that would pressure Tesla, Rivian, Lucid, and other domestic EV companies. It is likely Elon Musk would talk with Trump if there were any threat of a flood of Chinese EV imports.

Russia has throughout nearly four years of its ‘special military operation’ in Ukraine been largely successful in weathering constantly expanding US and EU sanctions. While isolated, its economy has stayed afloat, but it has been forced into desperate measures as sanctions take a toll on some key sectors.

Russian newspaper Izvestia reports that Russia’s commercial airline industry is having to call back aging, decommissioned planes in an effort to sustain passenger traffic. Soviet-made planes which are several decades old are being restored to service.

A Russian An-148 jet on a runway at Pulkovo airport in St. Petersburg shortly after an emergency landing on Feb. 24, 2012. via AFP

“The plan involves nine Tupolev Tu-204/214 jets, one Antonov An-148 and two Ilyushin Il-96 widebody planes delivered to carriers including Red Wings,” The Moscow Times says of the Russian media reports.

“Ten of the 12 aircraft, which are reportedly up to 30 years old, have already been returned to service, Rostec told Izvestia,” the report continues.

Out of a national fleet of over 1,100 airliners, nearly 70% are foreign-made aircraft. In 2022 soon after the Ukraine war kicked off, authorities launched a program to begin replacing foreign planes with domestically produced models.

But regional media says that the plan has failed over the past years in meeting its ambitious goals, which called for over 120 aircraft of different types to be produced between 2023 and 2025. Instead a little over a dozen have been produced.

Western sanctions have not only impacted the ability to replace parts and keep maintenance up to date, but entire factories and machines have had to retool and be revived to make up for the lack in foreign parts.

But the industry is about to find itself under even more pressure and strain, as Moscow takes drastic action in the face of isolation from the West:

In 2026, Moscow plans to slash federal aircraft and helicopter production spending by 1.6 times, from 139.6 billion rubles ($1.7 billion) to 85.7 billion rubles ($1 billion), according to Russian media citing the draft federal budget for 2026-28.

Subsidies for airlines to renew their domestic fleets will be eliminated entirely, down from 1.3 billion rubles ($16 million) in 2025. Support for aircraft maintenance is set to drop from 6.1 billion rubles ($75 million) to 3.6 billion ($44 million). Only the MC-21 medium-haul jet will see increased funding, with subsidies rising 25% in 2026.

In the meantime aviation accidents have been growing increasingly common in Russia, particularly in the recent years of the Ukraine war. While not every incident can necessarily be linked directly to sanctions, it is the case that these increasingly involve very old planes with subpar maintenance and mechanics upgrades.

Ukrainian officials have of late also pointed to cross-border drone attacks as successfully disrupting Russian oil and fuel…

⚡️⚡️⚡️BREAKING: 🇷🇺Russia’s largest private fuel supplier warns of a new aviation fuel CRISIS.
After Ukrainian drone strikes damaged over 20 oil refineries, Moscow relaxed fuel standards — allowing “winter diesel” to be made by mixing summer diesel with kerosene. That quick fix… pic.twitter.com/bm63W45a6A

— Kyrylo Shevchenko (@KShevchenkoReal) November 4, 2025

Like with most Western sanctions on ‘rogue’ states abroad, it is the common people who suffer most. 

The same trend has been seen in Iran, which over the last decade has witnessed horrific aviation accidents, including the loss of a sitting president when his military helicopter crashed near Azerbaijan. 

Submitted By Thomas Kolbe

Party politics today is essentially a mélange of media strategy, personality cult, and the constant struggle to expand one’s own sphere of power. At the Willy Brandt House, the Social Democrats’ command center, a two-track media strategy appears to have been agreed upon for this year: taking and giving.

From the wealthy, the party intends to take—by expanding inheritance taxes on corporate assets—what, according to the Social Democrats’ moral code, never truly belonged to them. To the citizen, meanwhile, they want to give a basket of cheap groceries. After years of steadily rising food prices, SPD strategists believe they have discovered the perfect marketing instrument—and behold: suddenly it’s about the purchasing power of “ordinary people.”

Of “Ordinary People” and the Emotionally Unstable

Yes, you heard that correctly. The ordinary man—that obscene phrase of left-wing salon arrogance, barely concealing its deep-seated contempt for real lives—is once again being invoked in a fight for survival. Lars Klingbeil and the self-appointed champions of social justice signal a return to their roots. After years spent cultivating the woke, emotionally unstable segment of society, attention now shifts back to the core voter: the worker.

Have the Social Democrats finally struck bedrock in their deep search for a solution to inflation and the impoverishment of the lower classes? Their idea: persuade major discount chains and food retailers, on a “voluntary” basis, to include a predefined basket of basic groceries at low and stable prices. It sounds childish—and it is.

Adding patriotic undertones to this piece of neo-feudal arrogance only makes the “Germany Basket” smell unmistakably like a product pulled straight from the SPD marketing kitchen.

Imagine its creation in practice: Lars Klingbeil, himself no stranger to calorie-dense cuisine, sits one weekend with his working group—“Germany Basket: The Ordinary Man Eats Healthy”—in front of the party’s position paper. With a mid-range Chianti and a juicy Pizza Tricolore (three-pack, Mediterranean Week) from the premium section of a well-stocked discounter, young socialists, union officials, and party grandees work their way, bite by bite, toward defining the basic provisions of the archetypal precarious household.

They are informed. They listen to the people. They are always close to the pulse of the times. Why not also at the breakfast table? Didn’t Germany’s minister of the heart, Robert Habeck, run his last campaign exactly this way—approachable, in a hemp sweater, sipping mate tea at kitchen tables across the republic? Perhaps the finance minister senses that elections are won as long as the pan is hot, the pizza is in the oven, and a cold beer doesn’t cut too deeply into the weekly budget.

One kilo of floury potatoes, gluten-free pasta for allergy sufferers, of course a non-alcoholic beer—sugary drinks excluded—a bit of greenery on top, maybe some long-life milk, plain yogurt, and a nostalgic nod to good old junk food, naturally soy-based. Thus it may soon take shape: the socially just, functionary-approved food basket, complete with the finance minister’s seal of approval.

Attention to Detail Required

Fine-tuning the Germany Basket forces the working group into excursions—reenacting life at the front lines of daily economic struggle, venturing into that terra incognita of the ordinary consumer’s harsh reality. They will advance to the places where elections are decided: the meat counters, the vegetable aisles with their astonishing variety, the endless freezer sections filled with goods from all corners of the world.

It would be instructive to attach to every product its pre-COVID price. Such an existential shock might spoil the soup for one or two party officials.

Everyone can participate in the Germany Basket—from the finance minister and the labor minister to union secretaries and representatives of food NGOs. After years of disagreement, a common denominator is quickly found—and lies just a few steps away, possibly already in the freezer of the SPD canteen.

Inflation and the World of Fables

How bewildering rising prices must seem in these circles, where inflation is imagined to be nothing more than the result of entrepreneurial greed and excessive profit-seeking.

That inflation might stem from an ever-growing state apparatus financing itself to a significant extent through the printing press would never occur to them. And that Germany’s energy crisis—the ban on importing cheap Russian gas, the nuclear phase-out, and the entire climate-regulation catalogue—might negatively affect agriculture and generate immense price pressure is likewise relegated to the realm of fairy tales.

Yet the surge in prices has been massive. Since before the lockdowns, food prices in Germany have risen by nearly 40 percent. Few households have been able to offset this increase through income gains. The problems cut deeply into household budgets. At the same time, open-border policies clog the housing market while regulation and rent controls systematically prevent new construction—creating an economic situation from which fewer and fewer households can escape.

In economics, one principle is well known: the cure for high prices is high prices. They signal investors to deploy capital and eliminate scarcity. That this does not happen is also the work of these culinary-minded Social Democrats. They cling desperately to price controls like rent caps and to the regulatory machinery of the climate complex. In the bureaucracy thus created—in a dictated framework that now extends even to the refrigerator—they find their power base.

Within SPD circles, they believe they have discovered yet another trump card in the attention economy. The Germany Basket is merely another media-political low point: tasteless, undignified, ineffective. The SPD is finished.

* * * 

About the author: Thomas Kolbe is a German graduate economist. For over 25 years, he has worked as a journalist and media producer for clients from various industries and business associations. As a publicist, he focuses on economic processes and observes geopolitical events from the perspective of the capital markets. His publications follow a philosophy that focuses on the individual and their right to self-determination.