The problem is that China is the biggest market in the world and western auto makers sell more cars in China than in their respective home markets. Protectionism will only benefit Chinese car makers. I mean, BYD would love to have a captive 27 million car a year market by themselves.

People don't seem to realise this is already playing out with semiconductors. Huawei didn't go away despite crushing sanctions. Same for Longsoon. Both still need fabs, both are now captive customers of SMIC despite previously being huge customers of TSMC. SMIC now has the required guaranteed volume to sink money into new nodes instead of just making automotive/appliance level chips. This whole thing is going to go down as the worst blunder in geopolitical maneuvers of all time. While the West completely controlled the most important parts of the pipeline they always had innate advantage. Trump gave that up for a one time, single decade advantage forcing Biden to double down to try make the best out of a slow motion train crash.

> SMIC now has the required guaranteed volume to sink money into new nodes instead of just making automotive/appliance level chips

They're at least a decade and a half behind the West. At the current rate, they're able to mimic 7nm only with atrocious yields. This isn't something you learn your way out of, because there are fundamental technological jumps that need to be made to go to high yield that don't come naturally from maxing out older lithographic techniques.