- Biden imposes 100% tariff on Chinese EVs to protect US manufacturers
- Tariffs extended to $18B worth of Chinese products
- Measures aim to counter cheap imports and boost US industry
President Joe Biden of the United States has announced a 100 percent tariff on electric vehicles manufactured in China as part of a series of measures intended to protect American manufacturers from cheap imports.
In a move that is likely to escalate trade tensions between the two largest economies in the world, the White House announced that it would impose stricter restrictions on $18 billion worth of Chinese products.
According to sources, the action was a preventative measure intended to halt the influx of cheap, subsidized Chinese products onto the American market and stifle the expansion of the green technology industry in the United States. A four-year review led to the decision.
Levies on lithium batteries will increase from 7.5% to 25%, critical minerals from zero to 25%, solar cells from 25% to 50%, and semiconductors from 25% to 50%, in addition to an increase in tariffs from 25% to 100% on electric vehicles.
Steel, aluminum, and personal protective equipment will be subject to 25% tariffs, up from the current range of 0% to 7.5%.
Biden stated that the increased tariffs were a proportionate response to China’s overcapacity in the EV sector, notwithstanding the risk of retaliation from Beijing. China, according to sources, produced 30 million EVs annually but sold only 22 to 23 million domestically.
Biden’s car tariffs are primarily symbolic, given that Donald Trump’s taxes virtually prevented Chinese EVs from entering the United States while he was president. Nevertheless, lobbying organizations have posited that a potential peril exists due to Beijing’s attempt to offset the vulnerabilities of its domestic economy through exports.
Chinese automobiles entering the United States market, according to the Alliance for American Manufacturing, would be an “extinction-level event” for American automakers.
Since taking office, the president has introduced a number of initiatives, such as the Chips Act and the Inflation Reduction Act, to boost US industry in high-tech sectors and in battleground states where Trump’s 2024 election is likely to take place.
“Invest in your future with Webull UK – get started with free shares.”
Since assuming the White House in 2021, Biden has maintained a resolute stance on trade. He asserts that his strategy is more precise and less perilous than his adversary’s approach to China’s challenge.
Should Trump win the presidency later this year, he declared in March that a 100% tariff would apply to “every single car that crosses the line” from Chinese-owned manufacturing facilities in China. “Those automobiles will not be for sale,” he declared. Critics argue that Trump’s pledge to impose a 60% tax increase on all Chinese imports would result in price increases for American consumers, who are already contending with elevated levels of inflation.
Biden stated in April that while he “was not seeking a conflict with China,” the United States must confront its “unfair economic practices and industrial overcapacity.” He stated, “I seek competition, but it must be fair.”
We will closely monitor the 90-day period following Tuesday’s implementation of the new tariffs for signs of Chinese retaliation. The objective, according to White House sources, was not to escalate trade tensions but rather to assist sectors of the US economy experiencing a cycle of disinvestment.
