Why would they allow it? It would destroy the remaining car industry in the US. Better to at least maintain a car industry, even if it’s inefficient.
We have exceptionally productive fields in the US tumor are the envy of the world. If we can't be productive in auto manufacturing, devoting a ton of our workforce too it is a misallocation of our limited resources.
If we are going to be subsidizing unprofitable industry fro national security purposes, we need to either 1) ruthlessly cut the least productive manufacturers from access to subsidies, or 2) nationalize it. Any other choices would be very inefficient.