Four months after the Biden Administration announced plans for the Office of the United States Trade Representative to quadruple tariffs on certain Chinese imports, including EVs, to 100%, the White House has confirmed the action, which will go into effect in two weeks. China has threatened retaliation as the trade war continues to intensify.
The saga of the looming trade wars between some of the planet’s largest markets continues as a tariff on Chinese-built EVs is about to go into effect in the US. This brouhaha essentially started in the EU a couple of years ago, when Chinese EV automakers like BYD, NIO, XPeng, and ZEEKR began importing their models into the region, which ruffled the feathers of several local legacy automakers – many of which are currently delivering inferior EV technology.
That fear of market share loss concerned the European Union Commission, which began a probe into the Chinese automakers last October and eventually determined that they had been “unfairly” subsidized as exports into the region. As a result, Europe has threatened tariffs on imports of vehicles built in China.
The US, on the other hand, wasted no time with threats and immediately proposed a 100% tariff on Chinese EVs entering the country, quadrupling the previous duties. Today, the Biden Administration made good on its promise, and those inflated tariffs on EVs and other adjacent technologies will start going into effect two weeks from now.
US tariffs on Chinese goods, including EVs, to begin 9/27
Today, the Office of the US Trade Representative (USTR) has confirmed President Biden has locked in the hiked tariffs on Chinese imports, including EVs. Per the USTR, those increased duties include a 100% tariff on Chinese-built EVs, a 50% tariff on solar cells, and 25% on steel, aluminum, EV batteries, and other critical minerals.
The tariffs above will go into effect on September 27, but there are more to follow. A determination by the USTR posted on Friday also stated that the US would impose a 50% duty on Chinese semiconductors, divided into two new categories – polysilicon used in solar panels and silicon wafers. Both those tariffs are expected to go into effect in 2025.
The USTR did not amend the tariff increase from zero to 25% on lithium-ion batteries, minerals, and components for EV batteries, which will begin this month, as mentioned above. Tariffs on those materials in other Chinese electronics, including laptops and cell phones, will take effect on January 1, 2026.
On the non-EV side, the USTR’s determination also includes new tariffs on other Chinese imports, including USTR doubled duties on Chinese face masks, surgical gloves, and syringes.
Lael Brainard, the White House’s top economic advisor, told Reuters these revised duties are “tough, targeted” tariffs to counteract China’s state-driven subsidies while simultaneously encouraging US OEMs to separate themselves from China’s monopolized supply chain and bring more industry back to North America. Per Brainard:
The 100% tariff on electric vehicles here does reflect the very significant unfair cost advantage that Chinese electric vehicles in particular are using to dominate car markets at a breathtaking pace in other parts of the world. That’s not going to take place here under the vice president’s and the president’s leadership.
Much like it has with the EU, China has threatened retaliation to the US tariffs on its EVs and other imported goods, comparing the imposed hikes to “bullying.” US trade partner Canada recently followed suit with the US, announcing its own 100% tariff on Chinese EVs.
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