The Biden administration has officially announced plans to increase tariffs on imports from China $18 billion to “protect American workers and businesses” from what it considers “unfair trade practices.” The new set of tariffs targets sectors deemed strategic by the White House, including those where the Biden administration has made large investments to create or retain American jobs (including the automotive industry).
Electric cars from China with 100 percent customs duty
Perhaps the most notable tariff increase concerns electric vehicles, for which duties are expected to quadruple from 25 to 100 percent. The tariff increase can be seen as a pre-emptive strike aimed at protecting American car manufacturers from new, potentially unfair competition from Chinese companies.
As of 2021, China's exports of battery electric vehicles (BEVs) have quadrupled, reaching $34 billion last year. Last year, electric vehicles worth almost $400 million came from China to the United States.
Cheap cars from China are the result of extensive subsidies
The gigantic success of the Chinese automotive industry is the result of extensive subsidies and non-market practices, which lead to a significant risk of overcapacity, says the White House. As a result of these fraudulent activities in 2022-2023, China's electric vehicle exports increased by 70 percent.
The United States is not the only country that sees China and its practices as a threat. In October 2023, the European Commission launched an investigation into subsidized electric cars from China, seeking to establish whether Chinese BEV value chains are benefiting from illegal subsidies that could potentially lead to economic harm to BEV producers in the EU.
Exports of electric cars from China in 2019-2023 / statista.com
