At the recent G7 summit in Kananaskis, Canada, European Commission President Ursula von der Leyen made a striking acknowledgment of former President Donald Trump’s long-standing concerns about China’s trade practices. Von der Leyen conceded that Trump’s warnings about China’s market disruption through subsidies and raw material dominance were accurate, particularly in sectors like automotive, battery production, and renewable energy.
The EU leader criticized Beijing’s approach to global trade, highlighting issues with intellectual property violations and strategic market manipulation. In response, G7 nations are developing a minerals action plan, though carefully avoiding direct references to China in their draft statement.
The impact of Chinese trade practices is being felt particularly strongly in Brazil, where an influx of Chinese electric vehicles is causing significant concern among local automotive industry leaders. BYD, currently the global leader in electric and plug-in hybrid vehicle production, has made Brazil its primary overseas target, with four shipments already delivered in 2025 totaling approximately 22,000 vehicles.
Brazilian auto industry data suggests Chinese vehicle imports will see a 40% increase this year, reaching roughly 200,000 units and capturing 8% of the light vehicle market. This surge comes as Chinese
manufacturers face increasing restrictions in other markets, including substantial tariffs in Europe and the United States, along with software restrictions on Chinese vehicles.
Brazil’s government finds itself in a complex situation, attempting to balance environmental goals with industrial protection. While the country eliminated EV import tariffs in 2015 to promote clean energy adoption, it reintroduced a 10% duty last year, planning to increase it to 35% by 2026. Industry groups are now pushing for an accelerated tariff implementation schedule.
BYD’s announced plans to convert a former Ford facility in Bahia into a production center have faced delays, with full operations now expected in December 2026. Labor union representatives have expressed concerns about the lack of local supplier engagement, questioning the real economic benefit for Brazil.
Similarly, Great Wall Motor (GWM), which acquired a former
Mercedes-Benz plant in 2021, has experienced delays but plans to begin producing its Haval H6 SUV soon. The company claims to be in discussions with approximately 100 local suppliers.
The situation presents a particular challenge for President Lula’s Workers Party administration, which must balance job protection with environmental commitments ahead of Brazil’s hosting of the COP30 climate summit in November. While Brazil possesses valuable mineral resources for EV production, including lithium, it lacks the necessary infrastructure for a complete EV supply chain.
Chinese manufacturers currently dominate Brazil’s electric vehicle market, accounting for over 80% of sales. The country’s auto industry representatives support new brand entry but emphasize the importance of local production, job creation, and technology transfer.
Brazilian officials are reviewing industry requests to expedite tariff increases while maintaining existing import allowances for plug-in hybrids and battery-electric vehicles through mid-2025. These policies have contributed to the current surge in Chinese vehicle imports, as manufacturers rush to capitalize on remaining incentives before stricter regulations take effect.
The situation reflects a broader global challenge in managing China’s expanding industrial influence while protecting domestic industries and pursuing environmental goals. As both Europe and Brazil grapple with these issues, Trump’s earlier warnings about China’s trade practices have gained renewed attention and validation from
international leaders.