Biden Administration Raises Chinese EV Import Taxes To 100%
In a significant move likely to escalate trade tensions between the world’s two largest economies, US President Joe Biden has announced a 100% tariff (four fold) on Chinese-made electric vehicles (EVs). This is part of a broader package designed to shield American manufacturers from inexpensive imports.
The White House disclosed that it would impose stricter tariffs on Chinese goods worth $18 billion. This follows on from a four-year review aimed at preventing subsidised Chinese products from overwhelming the US market and stifling the American green technology sector.
In Feb 2023, Elon Musk, Tesla's CEO, expressed concern on the competitive threat posed by Chinese automakers in the global electric EV market and advocated for proper trade barriers.
Key changes include an increase in tariffs from 25% to 100% on EVs, from 7.5% to 25% on lithium batteries, from zero to 25% on critical minerals, and from 25% to 50% on both solar cells and semiconductors.
Additionally, tariffs on steel, aluminium, and personal protective equipment rose to 25%, up from their current range of zero to 7.5%.
In response, Chinese state media accused the US of “undermining fair trade and environmental protection,” asserting that US consumers would bear the burdens of increased tariffs.
Despite potential retaliation from Beijing, Biden defended the tariffs as a necessary measure against China's overcapacity in the EV sector. In said note, he also cited that China produces 30 million EVs annually but can only sell 22-23 million domestically.
However, it is good to point out that this entire tariff hike drama on EVs is more of a preventive measure as Chinese EV-makers have already excluded US market expansion plans due to sanctions imposed during Donald Trump’s administration.
Biden meanwhile maintains a tough stance on trade since 2021, proposing a more focused approach to counter China’s economic practices. Aptly, this contrasts greatly against predecessor Trump’s ‘blockades’.
Biden has stated he seeks fair competition rather than conflict with China, emphasising the need to address China’s unfair economic practices and industrial overcapacity.
The new tariffs, set to take effect 90 days from Tuesday, will be closely monitored for possible retaliatory actions from China.
Written By
KS
More then half his life spend being obsessed with all thing go-fast, performance and automotive only to find out he's actually Captain Slow behind the wheels...oh well! https://www.linkedin.com/in/kumeran-sagathevan/
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