The U.S. could raise tariffs on imported electric vehicles from China as it looks for ways to protect the local clean-energy industry.
Officials from the Biden administration are pondering the possibility of changing the levies it has left on around $300 billion worth of Chinese goods from the Trump era. Chinese-made EVs are already subject to a 25% tariff, in addition to a 2.5% tariff on all auto imports, but are among the goods that could be hit with new tariffs.
Officials are also considering tariff-rate increases for various Chinese solar products as well as EV battery packs. Interestingly, tariffs may be lowered on other Chinese consumer products that are not viewed as strategically important by U.S. officials.
Speaking with The Wall Street Journal, White House press secretary Karine Jean-Pierre said the tariff review was part of a “strategic, thoughtful, deliberative approach to a bilateral economic and trade relationship with China.”
Joe Biden has been a strong proponent of protecting the U.S.’s automotive manufacturing industry and while speaking with members of the United Auto Workers union in November, said, “China is determined to dominate the electric-vehicle market by using unfair trade practices, but I will not let them. I promise you.”
Read: If Chinese EVs Are A Global Powerhouse, Why Can’t Americans Buy Them?
The Inflation Reduction Act has served as an important way for the U.S. to encourage manufacturers, in particular those in the automotive field, to locally produce products without input from China. From January 1, 2024, this policy will be strengthened and restrict EVs with batteries from China from being eligible for the full $7,500 federal EV tax credit.
Understandably, China isn’t particularly fond of the idea of tariffs being increased.
“The stabilizing momentum in U.S.-China relations should not be disrupted by domestic politics,” China’s ambassador to the U.S., Xie Feng said at a recent event. “The U.S. used to call for letting the market decide. Why should it reverse course now?”
