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Monday, May 27, 2024

U.S. Set to Unveil Fresh Tariffs on Chinese Electric Vehicles

The Biden administration is gearing up to unveil new tariffs on Chinese electric vehicles (EVs) and additional import taxes on various Chinese goods, including semiconductors, as early as next week, sources familiar with the matter revealed.

The decision to impose tariffs comes amidst mounting concerns within the administration that China’s actions could undermine President Biden’s efforts to bolster domestic manufacturing of clean energy products. China has been flooding global markets with competitively priced solar panels, batteries, electric vehicles, and other items.

These long-awaited tariffs stem from a four-year review of levies that former President Trump imposed on over $300 billion worth of Chinese imports in 2018. While most of Trump’s tariffs are expected to stay in place, President Biden intends to escalate levies in areas that received subsidies under the 2022 Inflation Reduction Act.

Among the targeted areas are Chinese electric vehicles, which currently face a 25 percent tariff. The administration plans to increase this to as high as 100 percent to deter purchases of Chinese EVs.

President Biden has previously voiced concerns about Chinese EVs, citing potential national security risks due to their internet-connected operating systems transmitting sensitive information to Beijing. Earlier this year, he took steps to block these vehicles from entering the United States.

The president aims to ramp up pressure on China and demonstrate his commitment to safeguarding American manufacturing ahead of the upcoming presidential election.

Debates within the White House over the fate of China tariffs have been ongoing since President Biden’s inauguration, with economic and political advisers frequently at odds over the appropriate course of action. However, China’s recent surge in production of electric vehicles, lithium batteries, and solar panels has reignited trade tensions, prompting Biden to pursue more aggressive trade restrictions.

Former President Trump has indicated that he would intensify his trade war with China if re-elected and has considered imposing tariffs of 60 percent or more on Chinese imports. In March, he proposed a 100 percent tariff on cars made in Mexico by Chinese companies.

The scale of the Biden administration’s tariffs, expected to encompass Chinese EVs, batteries, and solar products, remains unclear. However, it’s anticipated that the new tariffs on Chinese EVs will not extend to traditional gasoline-powered cars manufactured in China.

The impending release of the review, conducted by the Office of the United States Trade Representative, underscores the administration’s commitment to challenging China’s trade practices.

Additionally, the administration is expected to impose new tariffs on semiconductors, aligning with efforts to bolster domestic chip manufacturing as outlined in the bipartisan CHIPS and Science Act.

Some Democrats, including Senator Sherrod Brown of Ohio, have urged the administration to take more decisive action to protect the U.S. automobile industry. Last month, Senator Brown called for barring Chinese EVs from the United States, asserting that they pose an existential threat to American carmakers.

President Biden has also directed the trade representative to consider raising tariffs on imported steel and aluminum products from China. This follows accusations of China selling heavy metals at artificially low prices worldwide, undermining American producers.

While the prospect of new tariffs has drawn criticism from Beijing, the Biden administration remains steadfast in its commitment to address China’s trade practices and protect American interests.

Chris Matthews
Chris Matthews
I am a Political News Journalist of The National Era
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