In February, Tesla’s auto sales in Europe dropped sharply. According to Jato Dynamics, Tesla sold only 15,700 vehicles in Europe that month, a 44 percent decrease from last year. Consumer confidence has also declined sharply.  In a public poll conducted by German publication T-Online, over 100 ,000 readers participated, with more than 94 percent stating they would not consider purchasing a Tesla vehicle in the future. Only 3 percent of respondents said they would still consider buying a Tesla product. Meanwhile, China’s largest electric vehicle manufacturer, BYD, sold more than 4,000 vehicles in Europe — a 94 percent year-on-year increase. Overall, Chinese electric vehicle brands have now overtaken Tesla in European market share. This shift goes beyond corporate competition; it reflects a broader contest of national image and strategic influence. Tesla’s decline partly mirrors the global backlash triggered by the “America First” doctrine. Tesla CEO Elon Musk’s close ties with the Trump administration and his frequent, often controversial, commentary on international politics — at times perceived as interference in European politics — have fueled growing skepticism among European consumers towards the brand. For decades, American brands such as Apple, McDonald's, Nike and Gap succeeded globally. These brands sold more than goods; they also sold the American image of freedom, innovation, trust and moral responsibility fundamental to the country’s foreign relations.  But the “America First” approach is eroding this foundation. As European governments continue to seek ties with Washington, ordinary consumers are signaling discontent through their purchases. Tesla may be the first visible casualty, but more U.S. companies are likely to feel similar pressures soon. This trend should raise serious concerns among U.S. firms about the long-term sustainability of their international profit margins. At the same time, China is swiftly moving to fill the vacuum left by America’s retreat.  When the U.S. imposed tariffs on China and halted military and intelligence support to Ukraine, China responded with countermeasures — specifically, imposing tariffs on U.S. agricultural goods and signing a grain trade deal with Ukraine to expand imports. This not only increases geopolitical pressure on Russia but also signals goodwill to the European Union. Soon after, the European Parliament lifted the requirements that meetings with high-level Chinese officials need prior notification, paving the way for deeper China-EU engagement. Beijing followed by announcing that China’s second-ranked Premier Li Qiang would personally attend the China-EU summit — a move seen as both a strategic avoidance of direct affront to the U.S. and a signal of EU-China cooperation. His presence was interpreted as an effort to solidify economic partnerships and expand Chinese companies’ footprint in the European market. These trends are not isolated incidents; they reflect a larger, systemic shift in the balance of global influence. By 2024, China’s total goods trade reached 43.85 trillion yuan, around $6 trillion, making it the world’s largest trading nation. The U.S. followed with more than $5.3 trillion in total trade. While the U.S. still holds sway in some regions, China is now the top trade partner for most countries worldwide. China also accounts for 85 percent of the world’s rare earth processing, 70 percent of cobalt supply chains, 50 percent of lithium processing, and more than 40 percent of refined copper and nickel. Through overseas acquisitions and government policy support, Chinese firms have built a dominant strategic position in the critical resources supply chain. Although Tesla’s U.S.-assembled vehicles are largely American-made, a significant portion of components, such as lithium iron phosphate batteries and electronic modules, are still imported from China, according to Reuters. Chinese workers earn an average of $4 per hour, compared to $22 in the United States. Under Beijing’s industrial policies, companies like BYD have rapidly scaled up, and in 2024, BYD surpassed Tesla to become the world’s top-selling electric vehicle manufacturer. Prioritizing domestic interests, the U.S. sought to curtail China’s rising global influence and reduce its trade deficit through a trade war. Yet paradoxically, the America First strategy has created strategic openings for Beijing.  As Washington retreats from international engagement, China continues to expand its influence in Africa, Latin America and Southeast Asia through its trillion-dollar global policy, the Belt and Road Initiative. In a striking development, for example, the Thai government recently repatriated more than 40 Uyghurs to China — a move that drew concern from international human rights organizations and would have been unthinkable just years ago. This reflects China’s growing political clout in Southeast Asia and suggests a shift in regions once heavily aligned with American values. For decades, the U.S. built its soft power through foreign aid and global diplomatic leadership — pillars that also helped American businesses gain international trust. However, the inward turn of America First is eroding this foundation, leading to growing setbacks for brands like Tesla in global markets. Of course, it is important to recognize that China’s growth model is not one that can, or should, be replicated. Its rapid development has come largely at the expense of environmental and labor protections. According to China’s official “First Biennial Transparency Report on Climate Change,” the country is projected to require around $3.48 trillion in environmental spending between 2024 and 2030. According to the China Dissent Monitor, China saw over 3,600 mass protest incidents in the past two years. These reflect the cost of an unsustainable, resource-intensive growth strategy. In this context, the top U.S. priority should not be to launch a global trade war. Rather, America should consolidate its resources to strategically respond to China’s systemic challenge. First, the U.S. should focus its tariffs and regulatory scrutiny specifically on Chinese products — especially those tied to state subsidies, forced labor or environmental degradation exported to the U.S. either directly or through third countries. This would be a more strategic and targeted approach — one more likely to gain acceptance from U.S. allies and avoid triggering wider trade conflict. The U.S. should also avoid further alienating traditional allies such as Canada, Mexico and Europe. Instead, Washington should strengthen coordination with its allies by aligning supply chain due-diligence frameworks, such as the U.S. sanctions against forced labor and the forthcoming EU supply chain directive.  Together, they can block market access for products that do not meet shared labor and environmental standards. While these countries remain aligned with the U.S. politically, their consumers have begun to voice discontent through their purchasing behavior, reducing demand for American goods. This trend directly undermines the intended effects of U.S. tariff policy. Ultimately, it is the president’s advisors and Congress who must urgently reevaluate the global consequences of their policy decisions. Delay will only deepen the loss of market share, global trust and competitiveness for American firms — consequences that run counter to the very goals of the America First agenda Li Qiang is the founder and executive director of China Labor Watch. He is a veteran human rights advocate with over two decades of experience researching labor conditions and supply chains in China. ...read more read less