BYD Sues the U.S. Government Over Tariffs That Block Its Cars From America

Questioning the Basis for Tariffs

Historically, Chinese automakers have had little to no presence in the U.S. market, largely due to steep import tariffs and geopolitical tensions. That could begin to change, however, as a report by Caijing via CarNewsChina says BYD has filed a lawsuit against the U.S. government challenging several tariff-related executive orders.

Filed on January 26 by four U.S.-based BYD subsidiaries, the lawsuit (case number 26-00847) argues that the use of tariffs under the International Emergency Economic Powers Act (IEEPA) – a federal law that grants the president emergency powers over foreign economic transactions – exceeds the authority provided by the statute and should therefore be invalidated. A ruling in BYD’s favor could, according to the report, lower tariff barriers and potentially pave the way for the company’s passenger-vehicle lineup in the U.S.

Demand Meets the Gatekeepers

While a study from AutoPacific found that more Americans say they are open to buying a Chinese vehicle, U.S. dealers largely support policies that prevent Chinese automakers from entering the market. The National Automobile Dealers Association (NADA) has warned that Chinese OEMs could undermine fair competition due to state-backed industrial advantages.

Chery, for instance, has recently launched its first all-electric pickup truck in China with a starting price of about $18,300 – highlighting the stark contrast with electric pickup options currently available in the U.S., such as the Chevrolet Silverado EV.

So, how strong is BYD’s case? There is precedent suggesting it has a chance. A New York–based wine importer, V.O.S. Selections, won in a similar challenge last year. The U.S. government has since appealed that decision, and related cases have been stayed pending a final ruling in the V.O.S. Selections matter to resolve the scope of executive authority.

A Legal Domino

If the court rules in BYD’s favor, the report says the company’s factories in Brazil and Mexico could serve as gateways for its products to enter the U.S. market with lower tariffs.

BYD has shown a strong sales performance after dethroning Tesla in global battery-electric sales last year. Aside from affordable, daily drivers like the Seagull, the automaker also taps into the performance segment with the Yangwang U9 Extreme, which clocked a sub-7-minute lap at the Nürburgring in Germany.

For now, however, the company remains focused on its energy storage systems and commercial vehicles, which are produced at its manufacturing facility in Lancaster, California.