US to announce new tariffs on Chinese electric vehicles

The Biden administration is set to announce new tariffs of up to 100 percent on Chinese electric vehicles and additional import taxes on other Chinese goods, including semiconductors, as early as next week, according to people familiar with the matter.

The move comes amid growing concern within the administration that Mr. Biden's efforts to ramp up domestic manufacturing of clean energy products could be undercut by China, which is producing cheap solar panels, batteries, electric vehicles and other products. Also flooding the global markets.

The long-awaited tariffs are the result of a four-year review of those levies that President Donald J. Trump imposed tariffs on more than $300 billion of Chinese imports in 2018. Most of Trump's tariffs are expected to remain in place, but Mr. Biden plans to go further by increasing the levy in areas where the President provided subsidies in the 2022 Inflation Reduction Act.

This also includes Chinese electric vehicles, which currently face a 25 percent tariff. The administration is expected to increase this to 100 percent to make buying Chinese EVs prohibitively expensive.

Mr Biden has previously raised concerns about Chinese electric vehicles, saying Internet-connected Chinese cars and trucks pose a national security threat because their operating systems can send sensitive information to Beijing. They took steps earlier this year to block those vehicles from entering the United States.

The president wants to step up pressure on China and demonstrate his willingness to protect American manufacturing ahead of the November presidential election against Mr Trump.

The fate of China's tariffs has been the subject of intense debate within the White House since Mr. Biden took office, with economic and political advisers often squabbling over how to proceed. But this year, China has begun increasing production of the same products – electric vehicles, lithium batteries and solar panels – that the Biden administration is investing billions of dollars to begin producing in the United States. Beijing's move has reignited trade tensions between the two countries, forcing Mr Biden to move forward with more aggressive trade restrictions.

Mr Trump has said he would escalate his trade war with China if re-elected and this year said he was considering imposing tariffs of 60 percent or more on Chinese imports. In March, Mr. Trump said he would impose 100 percent tariffs on cars made in Mexico by Chinese companies.

The scale of the Biden administration's tariffs, which are expected to be imposed on Chinese electric vehicles, batteries and solar products, is unclear. The new tariffs on Chinese electric vehicles are not expected to apply to traditional gasoline-powered cars that are made in China, according to a person familiar with the plans.

The planned release of the review, which is being conducted by the Office of the United States Trade Representative, was first reported by Bloomberg News.

The strategic tariffs are also expected to include new duties on semiconductors, which Mr. Biden sought to boost in the bipartisan Chips and Science Act of 2022 legislation, which includes grants and other incentives for chip makers.

Some Democrats, including Senator Sherrod Brown of Ohio, are urging the Biden administration to take more drastic steps to protect the US automobile industry. Last month, Mr. Brown called for Chinese electric vehicles to be banned from the United States, arguing that they pose an “existential threat” to American carmakers, and on Friday he said import tariffs would be inadequate. Were.

“The tariffs are not enough,” Mr Brown wrote on social media platform X. We need to ban Chinese EVs from the US. Duration.”

Mr Biden said last month he was asking the Trade Representative to raise tariffs on steel and aluminum products imported from China as part of the review. The president and his allies have accused China of selling heavy metals at artificially low prices around the world to gain market share at the expense of American producers.

“My US Trade Representative is investigating trade practices by the Chinese government with respect to steel and aluminium,” Mr Biden told steelworkers in Pittsburgh, referring to Katherine Tai, the head of the office. “If that investigation confirms these anti-competitive trade practices, I am asking them to consider tripling the tariff rates for both steel imports and aluminum imports from China.”

The President said: “I am not looking for a fight with China. “I'm looking for competition – and fair competition.”

The US solar industry is also lobbying the Biden administration to impose new tariffs on Chinese imports as prices in that sector have fallen nearly 50 percent over the past year due to an influx of cheap solar panels and components. Last month, a group of seven major solar manufacturers filed trade complaints formally requesting that the Biden administration impose tariffs on solar products being imported into the United States from Southeast Asia, where Chinese companies have avoided existing tariffs. Has moved its operations to.

“We expect the tariff review to be conducted with an eye toward aligning tariffs with strategic priorities, including the continued buildout of domestic solar manufacturing,” said Michael Carr, executive director of the Solar Energy Manufacturers for America coalition.

The possibility of the United States imposing new China tariffs was criticized in Beijing on Friday. China's Foreign Ministry spokesman Lin Jian said the Trump administration's tariffs “seriously disrupted normal trade and economic exchanges between China and the US” and argued that they violated World Trade Organization rules. Were.

“Instead of ending those unfair practices, the US has continued to politicize trade issues, abuse the so-called review process of Section 301 tariffs and plan tariff hikes,” Mr Lin said, referring to the legal provision. Which Washington is using to justify. Tariff. “China will take all necessary measures to safeguard its rights and interests.”

In 2020, during the Trump administration, the United States and China agreed to a comprehensive “Phase 1” trade agreement, which allowed each of the two countries to review their bilateral tariffs after four years. That bilateral agreement remains in place, but the United States deferred the outcome of its review when the four-year deal came out in January.

That agreement potentially gives Washington leeway to raise tariffs. Citing the beginning of the pandemic, Beijing never complied with that agreement's specific targets for Chinese imports of American-made goods. Later it adopted a policy of replacing imports with domestic production.

Greta Pesch, a former general counsel in the office of the U.S. Trade Representative who helped oversee trade investigations for the Biden administration, said the EU was also considering new tariffs on Chinese electric vehicle imports, and was anticipated by Washington. The action was a result of China's increasingly aggressive trade policies. Without higher tariffs, he said, the U.S. auto sector will not be able to compete with heavily subsidized Chinese electric cars.

“When you look at the impact of China's long-term policies on EVs, they are producing a lot more and their capacity is far beyond their capacity,” Ms Paish said. “You really want to go that high to make sure you're bucking the trend that we're seeing.”

keith bradsher Contributed to the reporting.

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