Joe Biden is expected as early as next week to announce fresh tariffs on Chinese trade, with levies focused on strategic sectors including electric vehicles, in a review of measures first put into place under Donald Trump.
An announcement planned for Tuesday will keep the blanket tax rises introduced by the president’s predecessor but supplement them with targeted levies on industries connected to EVs, including batteries and solar cells, according to reports.
The plan, first reported by Bloomberg, would be the culmination of a review of the sweeping tariffs on Beijing that began in 2018. During his presidency, Trump imposed a 27.5% tax on imports of Chinese EVs that Biden has since extended, which has kept the number of Chinese-made cars on US roads extremely low.
If introduced, the EV tariffs would represent one of Biden’s biggest moves in the trade war with China. Last month, the president launched an investigation into the Chinese shipping industry alongside a call for higher levies on Chinese steel and aluminium as part of an appeal to union workers before the presidential election in November.
While China does not directly sell EVs in the US, it has majority stakes in other overseas firms that sell Chinese-made cars. Political leaders fear Chinese EV imports because China is able to undercut American manufacturers on price, while including more powerful batteries and advanced technology. The Alliance for American Manufacturing, an advocacy group, has said the introduction of Chinese cars to the US market would be an “extinction-level event” for US carmakers.
The EU and the US are reeling from a deluge of cheaper imports from China off the back of President Xi Jinping’s strategy to ramp up manufacturing as he attempts to turn around the economy. The restrictions on imports of Chinese “smart cars” would also address security concerns, since many have modems that could be hacked. The White House has said that cars connected to the internet could use cameras and sensors to collect details on and interact with critical US infrastructure.
In March, Trump said that if elected as president later this year he would put a 100% tariff on “every single car that comes across the line” from Chinese-owned manufacturing plants in China. “They are not going to sell those cars,” he said. He has promised to raise taxes on all Chinese imports by 60%, an approach critics say would raise prices for US consumers already grappling with inflation.
In April, Biden said he was “not looking for a fight with China” but that the US needed to stand up to China’s “unfair economic practices and industrial overcapacity”. “I’m looking for competition, but fair competition,” he said.
The White House did not respond to a request for comment.
In October last year, the EU said it was investigating evidence that the Beijing government provides illegal financial assistance to the Chinese EV industry. The inquiry may result in the introduction of additional tariffs by July. Similar investigations found that Chinese e-bikes and fiber optic cables were also being subsidised by a margin of between 4% and 17%.
