The US government is set to impose steeper tariffs on China-made electric vehicle imports as soon as next week, Reuters reports, citing three people familiar with the matter. Apart from electric vehicles, it also seeks to target several green energy products and medical supplies.
Tariff hike on EVs and other green energy products
The Biden administration reportedly plans to increase tariffs on Chinese electric vehicle imports fourfold from 25% to 100% next week.
The unnamed sources further disclosed the US government’s plans to increase import tariffs on Chinese-made batteries and solar panels. The current administration has heavily invested in these two areas to promote domestic production and boost the US economy.
In addition, China-made medical goods like syringes and personal protective equipment will also face import tariff hikes.
The government officials are reportedly preparing to announce the changes on Tuesday.
Unlevel playing field
Treasury Secretary Janet Yellen will attend the upcoming G7 Finance Ministers meeting in Italy as the Biden administration seeks to encourage other countries to establish a “coordinated front” to China, according to one of the sources.
Secretary Yellen recently had an exclusive interview with Marketplace, wherein she received a question about the US’ competence against China when it comes to electric vehicles and power batteries.
“We don’t think the playing field is level. And we think China is massively subsidizing investment in this set of industries that they have targeted as critical to their growth prospects.”
US Treasury Secretary Janet Yellen
The Inflation Reduction Act’s significant incentives have caused protests from US allies for nearly two years as it undercut their green energy economies. Since then, many of these allies have developed their own versions of the legislation to remain competitive.
Now, they are on track to form a united front on a common rival, China.
President Biden also proposed to triple the import tariffs on China-made steel and aluminum during his speech to union members in battleground Pennsylvania last month.”
“For too long, the Chinese government has poured state money into Chinese steel companies, pushing them to make so much steel, as much as possible, subsidized by the Chinese government,” Biden said at the time.
They’re not competing. They’re cheating. They’re cheating. And we’ve seen the damage here in America.”
US President Joe Biden
Potential complications
The potential import tariff hikes in the mentioned strategic sectors could provoke retaliation from the Chinese government amid intensified tensions between the world’s largest economies.
As the report noted, former President Trump’s wider tariffs imposition during his 2017-2021 leadership initiated a tariff war with China.
Apart from raising import tariffs, the US has also been pressuring the Mexican government to restrict Chinese companies from indirectly selling metal goods to the US via Mexico.
In response to the US’ intensifying push against Chinese imports, China claimed the measures were “counter-productive.” It also warned that such moves inflict damage on the US and the global economy.
