The US Government could quadruple the tariffs placed on Chinese-made electric vehicles (EVs) amid a long-running trade war between the two nations.
The Wall Street Journal reports the Biden administration will announce significant tariff increases this week, with Chinese EVs being slugged the hardest.
According to the publication, they will be subject to a tariff increase from 25 to 100 per cent, which doesn’t include the existing 2.5 per cent duty tax on all vehicles imported to the US.
Lotus Eletre
The reported tariff increase is even higher than that of President Biden’s main election rival, Donald Trump, who is understood to be pushing for a 60 per cent tariff but on all Chinese vehicles.
In March, former President Trump vowed to impose a 100 per cent tariff on vehicles made in Mexico for Chinese companies if he’s reelected later this year, which would affect BYD which has recently expressed its desire to open a factory south of the border.
At present, there are no Chinese brands selling their vehicles in the US, though the Polestar 2 and Buick Envision are among a handful of vehicles built in China and sold in the States.
Lotus – also owned by Chinese giant Geely, the parent of Polestar and Volvo – is also planning to launch its Eletre electric SUV in the US later this year, while the Emeya sedan is due there next year.
Buick Invision
In response to President Biden’s plans, a Chinese Foreign Ministry spokesperson warned the tariff increase could further escalate trade tensions between the countries.
“China will take all necessary measures to defend its rights and interests,” the spokesperson told the Wall Street Journal.
It’s understood the possible tariff increase is a part of a bid for President Biden to claw back support from the US automotive sector which is under pressure amid the rise of Chinese brands overseas.
Last year, President Biden backed the United Auto Workers (UAW) union in its industrial action against Ford, General Motors and Stellantis (formerly Fiat Chrysler Automobiles), with the incumbent critical at the time of the ‘Big Three’.
Lotus Emeya
Chinese EVs have also been the centre of a probe by the US Commerce Department, which claims modern vehicles “collect large amounts of sensitive data on their drivers and passengers [and] regularly use their cameras and sensors to record detailed information on US infrastructure”.
When the probe was launched in March, President Biden reportedly called it an “unprecedented action to ensure that cars on US roads from countries of concern like China do not undermine our national security.
“China’s policies could flood our market with its vehicles, posing risks to our national security. I’m not going to let that happen on my watch.”
Despite offering such a small number of models in the large US new-car market, China became the largest vehicle exporter in the world in 2023, dethroning Japan amid a boost of imports from Russia.
