BYD sues US government over Trump’s tariff authority

BYD has joined the growing rank of companies filing lawsuits against the US government challenging the Trump administration’s use of unilateral authority to impose sweeping tariffs and requesting a refund for all levies it has paid since April 2025. The lawsuit, the first by a Chinese automaker over US tariffs, follows similar complaints by thousands of global companies—including Toyota—challenging President Donald Trump’s use of the International Emergency Economic Powers Act (IEEPA) to impose border taxes.

Four of BYD’s US subsidiaries filed the lawsuit at the US Court of International Trade on 26 January, arguing that the law does not authorise border taxes as “the text of IEEPA does not employ the word ‘tariff’ or any term of equivalent meaning”. BYD said it had to file an independent complaint to protect its ability to be refunded for tariffs already paid. The lawsuit does not specify a dollar figure but seeks to void all IEEPA-based duties imposed over the past year.

BYD is effectively locked out of selling passenger cars in the US due to tariffs and planned restrictions on Chinese-origin connected technology, but that does mean its business has been unaffected. It has been producing new energy buses and commercial vehicles in the country via a plan in California for years, hiring 750 people locally to do so. It also supplies electric vehicle batteries, energy storage systems and solar panels to various US-based customers. The company said in the lawsuit that it needed to preserve its right to recover tariffs already paid plus interest.

The US Supreme Court is expected to rule on the legality of the tariffs in a separate high-stakes case, although Trade Representative Jamieson Greer noted earlier in February that the court was taking its time given the “enormous” stakes involved. It should be noted that six of the nine Justices on the Supreme Court were installed either by President Trump or his Republican predecessors, effectively granting him a partisan supermajority.

Trump has repeatedly warned that Chinese automakers pose an existential threat to the US automotive industry and national security. Indeed, he is responsible for instigating the ‘trade war’ during his first administration. More recently, however, he has repeatedly signalled an openness to Chinese players that build vehicles domestically. During the campaign he said large factories being built across the border in Mexico should instead be constructed in the US with American workers. He reiterated this sentiment at a Detroit event in January 2026, stating he would welcome Chinese companies building plants and hiring Americans.

Beyond things said by Trump—he says many things—there are signs that a potential softening of the administration’s stance toward China could be underway. Executive Director of the Commerce Department’s Office of Information and Communications Technology, Elizabeth Cannon, whose office was instrumental in establishing strict rules on Chinese vehicle technology imports, abruptly resigned in January 2026. The same month, the Commerce Department also withdrew a September proposal to impose restrictions on Chinese drones, and Trump also agreed recently to sell Nvidia’s AI chips to Chinese customers and dismissed several National Security Council members last year.