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Energy

Biden administration weighs tariff increase on Chinese-made EVs

Dec 22, 2023

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The Biden administration wants to put more electric vehicles (EVs) on American roadways, just not Chinese-made models. According to The Wall Street Journal, the White House is considering raising the nation’s tariff on imports of automobiles from China.

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It would mark the second time a tariff increase like this has occurred since 2018, when former President Donald Trump hiked the rate from 2.5% to 27.5%. This year, the current administration has already taken things a step further, blocking tax breaks for all foreign-made EVs.

President Joe Biden also issued new rules preventing American car companies from accessing incentives if they use parts or raw materials sourced from China to make electric vehicles domestically.

“President Biden entered office determined to reverse the decades-long trend of letting jobs and factories go overseas to China,” John Podesta, a senior adviser to the president on clean energy innovation. “We’re helping ensure that the electric vehicle future will be made in America.”

Chinese vehicle exports have been trending upwards over the several years, expected to jump by 25% in 2024 as they are now making their way into European markets. The influx of vehicles made in China is expected to collectively cost Europe’s carmakers over $7 billion in profits by 2030.

“Global markets are now flooded with cheaper Chinese electric cars and their prices kept artificially low by huge state subsidies,” said European Commission President Ursula von der Leyen. “This is distorting our market.”

U.S. officials see Chinese electric cars as a threat to the American auto industry. On average, EV models in the U.S. can cost more than twice what they do in China, a price point fueled by Beijing’s 90% stranglehold over the global EV supply chain and about $130 billion in state subsidies for the industry since 2016.

The potential for further increases on Chinese-made vehicle tariffs comes after a bipartisan group of U.S. lawmakers asked the Biden administration in November to do exactly that.

“It is critical that tariffs on [Chinese] automobiles not only be maintained but also increased to stem the expected surge in [Chinese] imports,” the lawmakers wrote in a letter to the Office of the United States Trade Representative, adding that an investigation should be launched into Chinese vehicles “and the harm they pose to the American automotive industry and American workers.”

The group of lawmakers also called for a probe into ways the U.S. can prevent China from importing vehicles into the country via Mexico, where three major Chinese EV companies are now planning to build new factories with an eye on American consumers.

“China has a bigger manufacturing scale than all other countries,” Biden said. “And they’re using that scale to make these batteries not just in China, but they’re making them in Germany, and in Mexico. And now exporting those electric vehicles around the world with sites on the American market, and they think they’re gonna win.”

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[JACK ALYMER]

THE WHITE HOUSE WANTS MORE EVS ON AMERICAN ROADWAYS – JUST NOT ONES MADE IN CHINA. 

THE BIDEN ADMINISTRATION IS CONSIDERING RAISING THE NATION’S TARIFF ON IMPORTS OF AUTOMOBILES FROM CHINA. THAT’S ACCORDING TO THE WALL STREET JOURNAL.

IT WOULD BE THE SECOND TIME THIS HAS HAPPENED SINCE 20-18, WHEN FORMER PRESIDENT TRUMP HIKED THE RATE FROM TWO-AND-A-HALF-PERCENT TO TWENTY-SEVEN-AND-A-HALF-PERCENT. 

THE ADDITIONAL TARIFF WOULD ADD TO SEVERAL OTHER MEASURES FROM THE CURRENT ADMINISTRATION – INCLUDING A BLOCK ON TAX BREAKS FOR ALL FOREIGN-MADE ELECTRIC VEHICLES.

THE BIDEN ADMINISTRATION ALSO ISSUED NEW RULES PREVENTING AMERICAN CAR COMPANIES FROM ACCESSING INCENTIVES IF THEY USE PARTS OR RAW MATERIALS SOURCED FROM CHINA.

CHINESE VEHICLE EXPORTS HAVE BEEN TRENDING UPWARDS OVER THE LAST SEVERAL YEARS, EXPECTED TO JUMP BY 25-PERCENT IN 20-24 AS THEY ARE NOW MAKING THEIR WAY INTO EUROPEAN MARKETS.

THE INFLUX OF VEHICLES MADE IN CHINA IS EXPECTED TO CUT INTO THE PROFITS OF EUROPEAN CARMAKERS BY AS MUCH AS SEVEN-BILLION-DOLLARS BY 2030.

IT’S ONE REASON U.S. OFFICIALS SEE CHINESE ELECTRIC CARS AS A THREAT TO THE AMERICAN AUTO INDUSTRY. 

ON AVERAGE, EV MODELS IN THE STATES COST MORE THAN *TWICE WHAT THEY DO IN CHINA- 

A PRICE POINT FUELED BY BEIJING’S NINETY-PERCENT STRANGLEHOLD OVER THE GLOBAL EV SUPPLY CHAIN AND MORE THAN A HUNDRED BILLION IN STATE SUBSIDIES.  

THE POTENTIAL FOR FURTHER INCREASES ON CHINESE-MADE VEHICLE TARIFFS COMES AFTER A BIPARTISAN GROUP OF U.S. LAWMAKERS ASKED THE WHITE HOUSE IN NOVEMBER TO DO EXACTLY THAT.

THEY ALSO URGED THE ADMINISTRATION TO INVESTIGATE WAYS TO PREVENT CHINA FROM EXPORTING VEHICLES TO THE U.S. FROM MEXICO, WHERE THREE MAJOR CHINESE EV COMPANIES ARE NOW PLANNING TO BUILD NEW FACTORIES WITH AN EYE ON AMERICAN CONSUMERS.