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Biden Set To Impose 100% Tax On Chinese EVs

Key Takeaways

  • Biden plans to raise tariffs on Chinese EVs, almost doubling their prices in the US.
  • New tariffs will also impact other Chinese products besides EVs.
  • Chinese automakers may still sell EVs in the US through operations in Mexico.

US President Joe Biden is reportedly set to impose an impossibly high tariff on electric vehicles (EVs) imported from China. This information first came to light via The Wall Street Journal, which cited unnamed sources close to the matter.

According to the report, the existing 25% tariff for Chinese EVs, set by ex-President Donald Trump via the “Section 301 Tariffs,” will be increased four-fold or up to nearly 100%. That means battery-powered EVs from the People’s Republic will have an even harder time trying to crack the US market, which is exactly the aim.

It’s Not Just On EVs

Biden’s supposed decision to revise the Section 301 tariffs stems from a review that started in 2022. According to the sources, the changes, which will be announced as early as Tuesday, will also affect several other Chinese products. Besides the increased tax on Chinese EVs, new tariffs will be imposed on semiconductors, solar equipment, and medical supplies like syringes and personal protective equipment.

The call to restrict US borders against Chinese-made products isn’t unprecedented, as lawmakers have been urging the government – even calling for a total ban – to take action on the emergence of Chinese EVs globally. China has previously condemned these practices, accusing the Biden administration of breaking international trade rules.

Related

Automakers Sourcing Graphite In China Score Massive Tax Credit Extension

Companies can continue to source graphite there until 2027 and still qualify for the credit.

And Then, There’s Mexico

As stringent as the supposed tariffs will be under the Biden administration, a gaping loophole is found across America’s southern border: Mexico. The current restrictions cover EVs made in China but don’t necessarily impose sanctions on Chinese products made in Mexico. BYD was one of the Chinese automakers reportedly setting up shop there, though the company confirmed weeks later that it wouldn’t sell cars to Americans for some time.

Meanwhile, other Chinese automakers, such as Chery, have previously intended to sell cars in the US. Zeekr, a brand born within the Geely-Volvo wedlock, even showcased its cars at the 2024 Consumer Electronics Show in Las Vegas. However, Zeekr vice president Mars Chen confirmed to CarBuzz in an interview at the recently concluded Beijing Auto Show that its presence in the US wasn’t connected to retail, and the company had no plans to sell to American buyers soon.

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