Yesterday, Biden made a move that many were expecting: he announced a series of tariffs on $18B worth of Chinese goods, including a 100% tariff on Chinese electric vehicles (EVs). The Alliance for American Manufacturing had described the influx of heavily subsidized Chinese EVs into the US market as an “extinction-level event for the US auto industry.”
- These tariffs don’t stop at EVs. Tariffs on solar cells and semiconductors will double from 25% to 50%, while certain steel and aluminum products will rise to 25% — on top of lithium batteries, medical supplies, and other goods, set to go into effect between 2024 and 2026.
- Biden’s economic advisor, Lael Brainard, stated that these measures are aimed at preventing the US from being “undercut by a flood of unfairly underpriced exports from China.”
Message sent: While the increase in EV tariffs may seem more symbolic, as Chinese EV makers have already been locked out of the US market due to tariffs first imposed in 2019 by former President Donald Trump, there still could be secondary impacts on consumers via inflation and broader global repercussions. According to Wolfe Research, the new tariffs could pave the way for the EU to implement similar measures — and the White House anticipates that “Europe, Turkey, Brazil, India, many other countries” may follow suit.
Read: The shift of manufacturing from China to Mexico is sending the Mexican Peso soaring
