Why ‘reverse tech transfer’ from China remains a non-starter in the US auto industry

For decades, Western carmakers complained that China forced them to hand over technology in exchange for access to the world’s largest auto market.

Now the tables have turned.

As Chinese carmakers capture global market share with cheaper, high-quality electric vehicles, countries including Canada and members of the European Union are embracing a “reverse tech transfer” strategy – by seeking Chinese investment and technology to strengthen their own industries.

The United States, however, is taking the opposite approach.

Tariffs on Chinese EVs have expanded, Chinese-owned auto companies are being banned or put on notice, and lawmakers are weighing new legislation to block the new global leader in electric vehicles.

Analysts say despite abundant scope for reverse tech transfer that could improve American carmakers’ competitiveness, Chinese companies would likely remain locked out of the market due to deep-seated barriers: geopolitical tensions, espionage concerns, economic protectionism, bipartisan opposition in Congress and resistance in local communities.