Biden to impose 100% tariffs on Chinese EVs

The trade war is escalating between the US and China, and the latest target is EVs. On Tuesday, the Biden administration is reportedly set to announce a hike in tariffs on Chinese electric vehicle imports to as much as 100% to stop the southeast nation’s EVs from entering the country and claim American automakers’ market share.

The move is also expected on China-made semiconductors, batteries and clean energy goods, which have flooded the American markets recently, reports the Wall Street Journal.

The core reason for tariff hikes is Beijing’s industrial overcapacity in sectors like EVs, solar panels and lithium batteries, which are driven by substantial government subsidies. They allow the country to produce better products at a lower price.

For example, the average price of an EV in the US is $47,500, while an EV in China costs $28,000, according to Dunne Insights.

The cost difference is problematic, considering the influx of artificially cheap Chinese goods has historically harmed American industries. And President Joe Biden doesn’t want the same thing to happen to US automakers.

He has promised to protect industries and workers from foreign competition, especially in swing states. Recently, Biden proposed increasing tariffs on Chinese steel.

Republican front-runner and former president Donald Trump has also promised even higher tariffs on all Chinese imports if re-elected.

But not all are happy
Environmentalists and climate change activists worry the tariffs aimed at restricting affordable Chinese EVs in the US market will jeopardize emission goals as it will put pressure on another Biden administration goal: reducing carbon emissions.

Some, like Carlos Tavares, CEO of Stellantis, believe that competition should be tackled through innovation and cost reduction rather than tariffs.

Others, like Tesla’s Elon Musk, argue that Chinese EV makers could dominate the global market without trade tariffs.