US President Joe Biden’s administration is expected to announce plans as early as next week to significantly increase import tariffs on Chinese-made electric vehicles and a range of products related to the new energy economy, according to US media reports.
Following a review of the Section 301 tariffs originally introduced by former President Donald Trump’s administration in 2018, the Office of the U.S. Trade Representative (USTR) is expected to raise tariffs on EVs from China to approximately 100% from the previous tariff rate. ing. The Wall Street Journal reported that it was 27.5%.
Citing people familiar with the situation, the magazine reported that important minerals from China would also be subject to the tax, but did not specify the new tax rate.
In addition to EV tariffs, the USTR will also increase tariffs on batteries and solar cells, while other existing Chinese taxes from the Trump era on about $300 billion worth of goods will remain in place, according to a report from Bloomberg. The announcement is likely to be made on May 16th.
China’s current tariffs on EVs include a 2.5% tax on all vehicles imported into the United States.
The Biden administration has not yet confirmed the plan, but some of the president’s top economic officials have expressed concerns about China’s manufacturing overcapacity and the potential for that overflow to flow into the U.S. market.
During a visit to China last month, U.S. Treasury Secretary Janet Yellen called on Treasury secretaries around the world to address the country’s overcapacity in industries, particularly in new energy vehicles and solar modules.
Commerce Secretary Gina Raimondo said Wednesday in testimony before the House Appropriations Committee that China could increase its share of global manufacturing production to 60% from the current “approximately 30%” in response to slowing economic growth. expressed concern that there is. She suggested a response was imminent.
“It’s not a secret… [the Chinese government’s] The strategy is to increase production,” she told MPs. “I’m very concerned about the possibility of them discarding cheap products, whether it’s electric cars, traditional semiconductor chips, critical minerals. The list is long.
“We work very closely together [the US Trade Representative office] It’s about identifying where we are most vulnerable and what actions we can take,” Raimondo added.
While China’s significant tariff increase on electric vehicles appears significant, the move is not surprising given the Biden administration’s recent messaging, as imports of products from China to the United States are almost non-existent. , Mary Labrie said there won’t be any major changes. , senior fellow at the Peterson Institute for International Economics.
02:22
US Treasury Secretary Janet Yellen leaves China, citing ‘difficult conversations’ and complaints of overcapacity
US Treasury Secretary Janet Yellen leaves China, citing ‘difficult conversations’ and complaints of overcapacity
Lovely pointed out that imports of EV batteries and critical minerals from China already face non-tariff restrictions.
Under the Inflation Control Act signed by Biden, tax credits of up to $7,500 for new electric vehicles and up to $4,000 for used electric vehicles are available for materials such as cobalt, lithium, graphite and nickel used in EV batteries. of minerals should be used. Must be extracted and processed in North America, or at least not from a “foreign entity of concern.”
Labrie said this would “disconnect” supply chains and encourage Chinese manufacturers to set up factories in countries that are not subject to tariffs or other restrictions. “It’s like adding more protection to protection, and that’s why I think some of it could be described as a little bit performance-y.
“They will jump over the tariff wall by investing in overseas markets,” she says. “You already know that the Chinese are trying to build factories in Hungary. So this is a way for them to get around these very high tariffs, just like Japan did in the 1980s.”
Chinese battery maker Contemporary Amperex Technology plans to build a 7.3 billion euro (US$7.9 billion) factory in Hungary and begin production next year, according to a paper by the think tank Center for European Policy Analysis.
“The U.S. industry would welcome tariffs on Chinese EVs, which would basically give them full market protection,” LaBrie said. “The question will be who will make affordable EVs.”
