President Biden Plans to Impose 100% Import Tax on Chinese Electric Vehicles: Report

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By Car Brand Experts

Concerns have been raised by the U.S. auto industry and regulators about the potential competition from Chinese electric vehicles if they enter the American market. To address this issue, the Biden administration is reportedly considering a drastic measure: imposing a 100% import tariff on Chinese electric vehicles.

According to The Wall Street Journal, this announcement could happen as early as Tuesday. The report outlines the areas where U.S. protectionism will be focused, including renewable energy technologies, their production resources, and the final products like minerals, batteries, and solar panels. The key highlight is the proposed quadrupling of the current 25% tariff on electric vehicles imported from China to a hefty 100%. Additionally, a 2.5% import tax on cars may also be levied on top of the increased tariff.

BYD Yangwang U9 supercar
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BYD Yangwang U9 supercar. BYD

The existing tariff has proven effective in preventing Chinese brands like BYD from entering the U.S. market. However, the Biden administration is concerned that it may not be sufficient to counter the threat of increasingly affordable Chinese electric cars, which could significantly undercut the prices of even the cheapest U.S. models by thousands of dollars. By combining a 100% tariff with shipping expenses, budget-friendly Chinese options like the $6,700 Geely Panda Karting could lose their appeal when compared to similarly priced Nissan Versas. Moreover, this move indirectly supports local competition through subsidies.

Nevertheless, tariffs have significant short and long-term consequences. The substantial $367.4-billion trade deficit with China (as of 2022) gives China ample leverage to retaliate in ways that could harm U.S. interests. Chinese authorities have hinted at taking responsive measures. Moreover, these tariffs pose a challenge to the Biden administration’s stated objective of reducing transport emissions, as affordable electric vehicles could aid in achieving this goal.

While citing security concerns, historical evidence suggests that auto industry protectionism has primarily been used to shield uncompetitive domestic manufacturers during crises, often at the expense of consumers. From the “Chicken Tax” to the 25-year import prohibition, the federal government has recurrently obstructed cost-effective foreign alternatives, citing various justifications. While acknowledging the potential risks associated with Chinese automakers gaining a foothold in the U.S., these tariffs do not prioritize the interests of American consumers. Instead, they focus on facilitating the industry’s operations, regardless of the repercussions for financially strained American drivers.

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