Biden Administration Quadruples Tariffs On Chinese EVs

The Biden administration announced on Tuesday that it will impose a 100 percent tariff—quadrupling the current 25 percent—on electric vehicles imported from China in 2024

By Tyler Durden

The Biden administration announced on Tuesday that it will impose a 100 percent tariff—quadrupling the current 25 percent—on electric vehicles imported from China in 2024. In addition to EVs, the White House has significantly increased tariffs on Chinese steel and aluminum products, lithium-ion batteries, and solar cells.

“China’s using the same playbook it has before to power its own growth at the expense of others by continuing to invest despite excess Chinese capacity and flooding global markets with exports that are underpriced due to unfair practices,” Lael Brainard, director of the National Economic Council, told reporters at a call ahead of the announcement.

“China’s simply too big to play by its own rules.”

She added that the tariff increases are consistent with President Joe Biden’s China policy of “responsibly managing competition with China.” “We are working with our partners around the world to address our shared concerns about China’s unfair practices,” Ms. Brainard said.

The administration will make further adjustments to these tariffs as it obtains feedback from the private sector, consumers, allies, and China, according to a senior administration official on the call.

Chinese EVs Are Cheap and in Excess

EVs have been a strategic priority for both the United States and China.

For the White House, EVs are a centerpiece of its climate-related initiatives—achieving half of new car sales as EVs by 2030—and “Made in America” policy to boost the country’s auto manufacturing industry, a vital sector of the American economy.

After setting EVs as one of its priority industries a decade ago, the Chinese Communist Party doubled down at its annual plenary meeting concluded in March, calling EVs one of the “new productive forces.” Instead of changing its economy from investment-led to consumption-led, Beijing seems to be poised to export its way out of its current economic slump.

BYD electric cars for export waiting to be loaded onto a ship at a port in Yantai, in eastern China's Shandong Province, on April 18, 2024. (STR/AFP via Getty Images)

Heavy subsidies have driven China’s EV industry into overcapacity. Their prices are cheap, too.

China handed out $29 billion in EV subsidies between 2009 and 2022. Although the subsidies officially ended before 2023, other programs without “EV” in their names effectively continue the incentives. For example, Chinese media reported BYD snatching a third, or $1 billion, of the 2024 emission reduction subsidies from the Ministry of Finance.

As a result of 15-year-long subsidies, cheap Chinese cars have posed an “extinction-level” challenge to America’s auto industry, according to the Alliance for American Manufacturing, an advocacy group representing unionized steelworkers and other companies in the auto supply chain.

Driven by subsidies, China’s cheap EVs are also in excess.

Based on local government plans for the five years between 2021 and 2025, the China Center for Information Industry Development (CCID), an institution under China’s Ministry of Industry and Information Technology, expects Chinese EV production capacity to reach 36 million in 2025.

With 15 million Chinese EV sales forecast for 2025, excess Chinese EVs will reach 20 million next year.

China knew about the overcapacity problem and had planned a way out. In a December 2022 report, CCID mapped out exporting cars to the European market. However, it also recommended building factories in Latin America to take advantage of the local incentives there to further expand China’s global EV market share.

In March, BYD, a Chinese EV maker, introduced the BYD Seagull, a mini EV hatchback. The starting price is 69,800 yuan in China, or about $9,650. In Mexico, the price is 358,800 pesos, or about $20,990. It’s still much cheaper than the cheapest EV—about $30,000—in the United States. The average EV price in the United States is about $54,000.

---

Go paid at the $5 a month level, and we will send you both the PDF and e-Pub versions of “Government” - The Biggest Scam in History… Exposed! and a coupon code for 10% off anything in the Government-Scam.com/Store.

Go paid at the $50 a year level, and we will send you a free paperback edition of Etienne’s book “Government” - The Biggest Scam in History… Exposed! OR a 64GB Liberator flash drive if you live in the US. If you are international, we will give you a $10 credit towards shipping if you agree to pay the remainder.

Support us at the $250 Founding Member Level and get a signed high-resolution hardcover of “Government” + Liberator flash drive + Larken Rose’s The Most Dangerous Superstition + Art of Liberty Foundation Stickers delivered anywhere in the world. Our only option for signed copies besides catching Etienne @ an event.