The United States is all set to impose a 100% tariff on electric vehicles imported from China, according to a report from the Financial Times. The fresh measures, if taken, will be a major escalation in the ongoing trade war between the US and China and may attract tit-for-tat duties from the Xi Jinping-led Chinese administration.
The reported increase in the tariffs is a four-fold jump from the existing 25% and comes after senior officials from US the administration expressed frustration over China’s manufacturing “overcapacity” of electric vehicles, which poses a threat to US jobs and national security.
Previously, US President Joe Biden and his Republican challenger, Donald Trump, have spoken about going tough on China. This move can provide a strong footing for the Democrats to flaunt their anti-China credentials ahead of the US presidential elections in November of this year.
The domestic political opinion in the US seems to be against Chinese imports, with Ohio Democratic Senator Sherrod Brown even calling for a ban on Chinese EV imports. “Tariffs are not enough. We need to ban Chinese EVs from the US Period,” the Senator said, as per the Associated Press.
‘Extinction of US Auto sector’
The Alliance for American Manufacturing, a business group in the US, released a report in February warning that the introduction of cheap Chinese autos to the American market “could end up being an extinction-level event for the US auto sector.” The report revealed some glaring details that alerted the officials in the US administration, as the auto industry accounts for 3% of America’s GDP.
The fears came after the car model was launched by Chinese automaker BYD at a price of just $12,000 for people in China. The quality of craftsmanship in this car competes with that of American-made electric vehicles (EVs) priced three to four times higher, sparking concerns within the US automotive industry.
“China is now simply too large for the rest of the world to absorb this enormous capacity. Actions taken by the PRC today can shift world prices,” Treasury Secretary Janet Yellen said during her Guangzhou and Beijing in April.
“And when the global market is flooded by artificially cheap Chinese products, the viability of American and other foreign firms is put into question,” she added.
(With reports from AP)
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Published: 11 May 2024, 02:15 PM IST