US contemplates tariff hike on Chinese EVs

The Biden administration is mulling over an uptick in tariffs on Chinese-made EVs, as reported by the Wall Street Journal. The move is part of broader discussions on revisiting Trump-era duties on approximately $300 billion worth of Chinese goods.

China, the powerhouse of vehicle exports, has witnessed a 25% surge in exports, reaching a staggering 5.3 million units, a forecast from China Merchants Bank International claims. The growth is attributed to overcapacity and a slowdown in domestic demand within the world's largest auto market.

A bipartisan group of US lawmakers recently urged the administration to heighten tariffs on Chinese-made vehicles. Simultaneously, they called for an investigation into preventing Chinese firms from exporting to the United States through Mexico - a strategic move that raises eyebrows and plenty of questions.

Currently, Chinese automobiles are burdened with a 25% levy, a legacy from the Trump administration, persisting under President Biden. The ongoing debate within the US government aims to wrap up a comprehensive review of these tariffs early next year, targeting roughly $300 billion worth of Chinese goods.

Tesla, the electric vehicle pioneer, and other foreign automakers also have China as a crucial export hub. This global interdependence complicates matters, making any tariff adjustments ripple through the international automotive landscape.

The US lawmakers argue that the current import tariffs are inadequate, pointing out instances where American automakers export Chinese-made vehicles to the United States - a clear indication that adjustments are overdue.

China, for its part, is closely monitoring these developments and has pledged to take necessary measures to protect its legitimate interests. The potential tariff hikes are not just about economic calculations but carry geopolitical ramifications as both economic giants navigate the intricate web of global trade.

The Biden administration is also contemplating reducing tariffs on select Chinese consumer products deemed non-strategic. The goal is to strike a balance between economic interests and broader diplomatic considerations.

Via