US to impose tariffs on Chinese EVs next week

10 May 2024

New whispers of imminent tariffs targeting Chinese electric vehicles reverberate through the automotive industry. President Biden's administration is seemingly prepared to impose new levies on China's fast-growing EV sector and other key industries, including batteries and solar equipment. This would mark a strategic shift from the across-the-board tariffs favored under the Trump administration.

While the full details of the upcoming tariffs remain under wraps, sources close to the matter indicate they could be announced as early as next week. Amidst geopolitical tensions, national security concerns have pushed Biden to look critically at Chinese car imports, sparking uncertainty for Chinese automakers keen on entering the lucrative American market.

The Commerce Department is reviewing public comments on an investigation launched in February — probing potential national security risks associated with imported Chinese vehicles. Commerce Secretary Gina Raimondo has not shied away from hinting at "extreme action," which could translate into an outright ban on Chinese connected vehicles or heavily restrictive measures if those vehicles are deemed a threat.

The US government's scrutiny of Chinese EVs has generated a ripple effect of responses. Chinese industry experts criticize the move as politically motivated, warning that such measures would undermine fair market competition. China's Foreign Ministry maintains that these actions could weaken the delicate balance of supply chains, ultimately harming the US economy.

Yet, not all Chinese auto giants are deterred. Nio founder and CEO William Li – fresh off a recent US visit – openly expressed his hope that Chinese-branded cars might soon find a place on US roads. Li stressed the need for greater collaboration, particularly in artificial intelligence, in a world that's becoming increasingly fragmented.

Despite the optimism expressed by some manufacturers, it remains unclear whether the Biden administration's tariffs will become a major hurdle for Chinese EVs. While some Chinese-built vehicles, such as the Geely-owned Volvo EX30, have found creative ways to reach the American market, many Chinese automakers may face higher costs and greater challenges in breaking into the US.

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