US Likely to Impose 100% Tariff on Electric Vehicle Imports from China
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.
US President Joe Biden waves to the press before boarding Marine One on the South Lawn of the White House in Washington (AFP)
In an unfolding chapter of the US-China trade saga, a bold economic maneuver is on the horizon as the United States prepares to implement a steep 100% tariff on electric vehicles imported from China. This potential action, disclosed by the Financial Times, marks a significant intensification in the ongoing economic tensions between the two superpowers. This move could provoke reciprocal measures from China, led by President Xi Jinping, further fueling the trade war.
The proposed tariff represents a dramatic escalation from the current 25% duty, sparked by the US administration’s mounting dissatisfaction with China’s excessive electric vehicle production. This “overcapacity” is perceived as a direct threat to American jobs and national security, exacerbating the economic rivalry. The discourse around these measures has become a focal point in US politics, particularly as Democrats, including President Joe Biden, use this stance to strengthen their anti-China position in the lead-up to the November presidential elections. This sentiment is echoed by figures such as Ohio Senator Sherrod Brown, who advocates for even more stringent restrictions against Chinese electric vehicles.
This policy shift is underscored by a February report from the Alliance for American Manufacturing, which sounds an alarm over the potential market disruption caused by inexpensive Chinese automobiles. This report describes the severe impact these imports could have on the US auto industry, which is a crucial component of the nation’s economy, contributing 3% to the GDP. Concerns have been amplified by the introduction of a new electric vehicle model by Chinese automaker BYD, priced at a mere $12,000 in China—a figure that starkly undercuts its American counterparts, raising fears of an “extinction-level event” for US auto manufacturers.
Adding to the gravity of the situation, during her visits to Guangzhou and Beijing in April, US Treasury Secretary Janet Yellen articulated the global economic implications of China’s industrial strategy. She highlighted how China’s ability to flood the market with low-cost products not only distorts world prices but also jeopardizes the viability of American and other international firms, framing the narrative of this economic confrontation as a battle for industrial survival in the global arena.
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- Shubham Chakraborty, a Freelance Writer, holds an MBA from XLRI and boasts 6.5 years of extensive corporate experience. Departing from his corporate path, he embarked on a journey to fulfill his childhood dream of focusing on writing.
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