Multinational automaker Stellantis Chief Executive Carlos Tavares has just criticized the Biden Administration’s new tariff on Chinese-made electric vehicle imports in the US market, Fortune reports.
Stellantis CEO discourages protectionism
CEO Carlos Tavares recently asserted that the major tariff hike on Chinese-made electric vehicles in the US will “just going to end up with more inflation inside the bubble.”
Stellantis owns major auto brands in the US, including Chrysler, Jeep, and Dodge. However, CEO Tavares opposes the US government’s recent measures to protect local players. He even warned that three automotive “bubbles” are emerging in the US, Europe, and China due to trade barriers.
“Protectionism has a lot of drawbacks. They don’t appear immediately; they appear one after the other.”
Stellantis CEO Carlos Tavares
US tariff hike on Chinese EV imports
On May 14, US President Joe Biden officially announced a new tariff of as high as 100% on Made-in-China electric vehicles to curb their surge in the domestic market.
Apart from EVs, other green energy products like solar cells, semiconductors, steel, and aluminum imports from China will also face increased import tariffs with varying rates. Refer to the table below:
| Prior Import Tariff Rate | New Import Tariff Rate | Year of Imposition | |
| Steel and Aluminum | 0–7.5% | 25% | 2024 |
| Semiconductors | 25% | 50% | 2025 |
| Electric Vehicles | 25% | 100% | 2024 |
| Batteries, Battery Components and Parts, and Critical Minerals | Prior Import Tariff Rate | New Import Tariff Rate | Year of Imposition |
| Lithium-ion EV batteries | 7.5% | 25% | 2024 |
| Lithium-ion non-EV batteries | 7.5% | 25% | 2026 |
| Battery parts | 7.5% | 25% | 2024 |
| Natural graphite and permanent magnets | 0% | 25% | 2026 |
| Other critical minerals | 0% | 25% | 2024 |
| Solar Cells | 25% | 50% | 2024 |
| Ship-to-Shore Cranes | 0% | 25% | 2024 |
| Medical Products | Prior Import Tariff Rate | New Import Tariff Rate | Year of Imposition |
| Syringes and needles | 0% | 50% | 2024 |
| Personal protective equipment (PPE) (respirators and face masks) | 0–7.5% | 25% | 2024 |
| Rubber medical and surgical gloves | 7.5% | 25% | 2026 |
Moreover, the White House is also considering new penalties on Chinese electric automakers that move production to Mexico to bypass the 100% tariff in the US market.
EU reflects a similar concern
While the US government aggressively moves against Chinese EVs and other key product imports from China, Europe remains hesitant due to the potential consequences of imposing tariffs on China-made EVs.
Europe mirrors US concerns about Chinese EVs’ ability to undercut local brands in the region. European automakers struggle to offer EVs at the same prices as cheap China-made models.
As a result, the EU Commission launched an anti-subsidy probe against Chinese EVs and their impact on the local market. Moreover, the EU also mulls setting higher tariffs.
However, Rhodium Group’s research suggests that tariffs must exceed 50% to have an impact on the current European market and protect its local players against China’s low-cost EVs.
Despite this, Stellantis approached the market competition a little differently by partnering with China’s Leapmotor.
“Whether I like it or not, they are grabbing share. What I can do is leverage that dynamic.”
Stellantis CEO Carlos Tavares (via The Guardian)
Stellantis and Leapmotor recently declared plans to launch a sub-€20,000 electric hatchback in the European market by September 2024.
