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US to announce new tariffs on Chinese electric vehicles

US to announce new tariffs on Chinese electric vehicles

The Biden administration is expected to announce new tariffs of up to 100% on Chinese electric vehicles and additional import taxes on other Chinese products, including semiconductors, as early as next week, according to close sources folder.

The move comes amid growing concerns within the administration that Mr. Biden’s efforts to revive domestic manufacturing of clean energy products could be undermined by China, which is flooding global markets with solar panels, batteries, electric vehicles and other inexpensive products.

The long-awaited tariffs are the result of a four-year review of levies that President Donald J. Trump imposed on more than $300 billion in Chinese imports in 2018. Most of Trump’s tariffs are expected to remain in effect. force, but Mr. Biden plans to go beyond those measures by increasing levies in areas that the president flooded with subsidies in the Inflation Reduction Act of 2022.

This includes Chinese electric vehicles, which currently face 25% tariffs. The administration is expected to increase this amount to 100% to make purchasing a Chinese electric vehicle prohibitive.

Mr. Biden has previously raised concerns about Chinese electric vehicles, saying internet-connected Chinese cars and trucks pose national security risks because their operating systems can send sensitive information to Beijing. It took steps earlier this year to try to prevent these vehicles from entering the United States.

The president is seeking to increase pressure on China and demonstrate his desire to protect America’s manufacturing industry ahead of his clash against Mr. Trump in November’s presidential election.

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 clashing over how to proceed. But this year, China began ramping up production of the same products — electric vehicles, lithium batteries and solar panels — that the Biden administration invested billions of dollars to begin producing in the United States. Beijing’s move reignited trade tensions between the two countries, forcing Mr. Biden to pursue more aggressive trade restrictions.

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

The scale of the Biden administration’s tariffs, which are expected to be applied to Chinese electric vehicles, batteries and solar products, is unclear. New tariffs on Chinese electric vehicles are not expected to apply to traditional gasoline cars made in China, according to a person familiar with the matter.

The planned release of the study, conducted by the Office of the United States Trade Representative, was reported earlier by Bloomberg News.

The strategic tariffs are also expected to include new levies on semiconductors, which Mr. Biden sought to strengthen in the bipartisan CHIPS and Science Act, a 2022 law that includes subsidies and other incentives for chipmakers .

Some Democrats, including Sen. Sherrod Brown of Ohio, have urged the Biden administration to take more drastic action to protect the U.S. auto industry. Last month, Mr. Brown called for Chinese electric vehicles to be banned from entering the United States, arguing that they pose an “existential threat” to American automakers, and on Friday he said that the rights to imports were insufficient.

“Tariffs are not enough,” Mr. Brown wrote on the social media platform X. “We must ban Chinese electric vehicles in the United States. Period.”

Mr. Biden said last month that he was asking the trade representative, as part of the review, to also increase tariffs on steel and aluminum products imported from China. The president and his aides have accused the Chinese of selling heavy metals at artificially low prices around the world in order to gobble up market share, to the detriment of American producers.

“My U.S. trade representative is investigating the Chinese government’s trade practices regarding steel and aluminum,” Mr. Biden told steelworkers in Pittsburgh, referring to Katherine Tai, who heads the office. “If this investigation confirms these anti-competitive trade practices, then I ask him to consider tripling the tariff rates on steel and aluminum imports from China.”

The president added: “I’m not looking for a fight with China. I look for competition – and fair competition.

The U.S. solar industry has also been lobbying the Biden administration to impose new tariffs on Chinese imports, as the influx of cheap solar panels and components has led to lower prices in the sector by about 50% over the last year. Last month, a group of seven major solar manufacturers filed trade complaints formally asking the Biden administration to impose tariffs on solar products imported into the United States from Southeast Asia , where Chinese companies have relocated their operations to avoid existing tariffs.

“We hope the rate review will be done with the goal of aligning rates with strategic priorities, including the continued development of domestic solar manufacturing,” said Michael Carr, executive director of the Solar Energy Manufacturers for Coalition. America.

The prospect of the United States imposing new tariffs on China came under fire in Beijing on Friday. Chinese Foreign Ministry spokesperson Lin Jian said the tariffs imposed by the Trump administration “severely disrupted normal trade and economic exchanges between China and the United States” and asserted that They were violating World Trade Organization rules.

“Instead of ending these bad practices, the United States continues to politicize trade issues, abuse the so-called Section 301 tariff review process, and plan tariff hikes.” , Mr. Lin said, referring to the legal provision that Washington uses to justify this policy. prices. “China will take all necessary measures to defend its rights and interests.”

In 2020, under the Trump administration, the United States and China agreed to a sweeping “Phase 1” trade deal that allowed each country to review its bilateral tariffs after four years. This bilateral agreement remains in force, but the United States postponed the outcome of its review when the four-year mark arrived in January.

This agreement likely gives Washington leeway to increase tariffs. Beijing never met that agreement’s specific goals regarding Chinese imports of U.S. manufactured goods, initially citing the start of the pandemic. It then pursued a policy aimed at replacing imports with domestic production.

Greta Peisch, former general counsel for the Office of the U.S. Trade Representative who helped oversee the trade investigation on behalf of the Biden administration, noted that the European Union was also considering new tariffs on Chinese imports of electric vehicles and that the action expected from Washington was the result. China’s still aggressive trade policies. Without increased tariffs, she said, the U.S. auto sector won’t be able to compete with heavily subsidized Chinese electric cars.

“When you look at the impact of China’s long-standing policies on electric vehicles, China is producing far more and has far more capacity than it can absorb,” Ms. Peisch said. “You really have to go pretty high to make sure you buck the trend we’re seeing.”

Keith Bradsher reports contributed.

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Mattie B. Jiménez

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