Summary
- Biden Administration confirmed quadrupling tariffs on certain Chinese imports, including EVs to 100%
- European Union Commission previously determined Chinese EV automakers were unfairly subsidized
- US proposed and will implement 100% tariff on Chinese EVs starting in two weeks
- US will also impose tariffs on other Chinese imports such as semiconductors, lithium-ion batteries, and electronic components
- China threatened retaliation against US tariffs on its EVs and other goods, calling it "bullying"
Article
The Biden Administration has confirmed its plans to quadruple tariffs on certain Chinese imports, including electric vehicles (EVs), to 100%. This decision comes after threats from China of retaliation as the trade war between the two countries continues to escalate. The US government believes that these tariffs are necessary to counteract China’s state-driven subsidies and to encourage US companies to bring more industry back to North America.
The conflict over tariffs on Chinese-built EVs began in the European Union a few years ago when Chinese automakers started exporting their vehicles to the region. This move raised concerns among local legacy automakers, prompting the EU Commission to launch an investigation last October. The commission determined that Chinese automakers had been receiving unfair subsidies, leading to threats of tariffs on imports of vehicles built in China.
In response to these developments, the US proposed a 100% tariff on Chinese EVs entering the country, which has now been confirmed by the Office of the US Trade Representative. The increased duties will also apply to other critical materials like solar cells, steel, aluminum, EV batteries, and more. The US government views these tariffs as a way to address the unfair cost advantage that Chinese EVs have in dominating global markets.
The tariffs on Chinese goods, including EVs, are set to go into effect on September 27, with additional duties on semiconductors, polysilicon, silicon wafers, and other materials expected to follow in the coming years. The US government hopes that these tough and targeted tariffs will not only counteract Chinese subsidies but also incentivize US companies to move away from China’s supply chain and bring more industry back to North America.
China has responded to the US tariffs on its EVs and other goods by threatening retaliation and accusing the US of bullying. Canada, a US trade partner, has also announced its own 100% tariff on Chinese EVs. The ongoing trade war between the US and China is creating uncertainty in the global market, with stakeholders in both countries feeling the impact of these escalating tensions. It remains to be seen how these tariffs will affect the EV industry and trade relations between the US and China in the long term.
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