New 100% Tariffs On Chinese EVs: Biden’s Strategy To Boost American Manufacturing

On Tuesday, the Biden administration announced significant tariff increases on China, targeting roughly $18 billion in strategic industries, with a sharp focus on electric vehicles (EVs). These tariffs, which quadruple to 100% on Chinese-made EVs, are designed to counter China’s unfair trade practices and overcapacity while boosting U.S. industries. The move also aims to strengthen President Biden’s position heading into the November presidential election.

For decades, China has strategically moved to dominate various industries, from toys and clothing in the 1980s to semiconductors and renewable energy today. As of now, China produces a third of the world’s manufactured goods, surpassing the combined output of the U.S., Germany, Japan, South Korea and the U.K. This industrial might has given China a trade surplus in manufactured goods equal to a 10th of its entire economy.

The world’s second largest economy was a minor player in car exports just four years ago, shipping about 1 million low-priced vehicles annually to less affluent markets. Today, China has surged past Japan and Germany to become the world’s biggest car exporter, with shipments running at an annual pace of nearly 6 million vehicles. China’s car exports, in fact, hit a record high in April, with a year-on-year increase of 38%.

The $11,000 EV Challenging Tesla

As for EVs in particular, domestic sales have been strong and are growing. Last year, Chinese consumers purchased some 6.6 million EVs, according to the China Association of Automobile Manufacturers (CAAM).