The Biden administration announced on Tuesday its decision to quadruple the tariff on electric vehicles (EVs) imported from China from the current 25 percent to 100 percent starting in 2024. Along with EVs, the White House has also decided to escalate tariffs on Chinese steel and aluminum products, lithium-ion batteries, and solar cells.

Lael Brainard, director of the National Economic Council, explained the reasoning behind the tariff increases in a press briefing, stating, "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." She emphasized that "China's simply too big to play by its own rules" and affirmed that the tariff hikes are in line with President Joe Biden's policy of "responsibly managing competition with China."

The move comes amidst reports of China's EV industry benefiting from heavy subsidies amounting to $29 billion between 2009 and 2022, which have contributed to overcapacity in the market. Subsidized Chinese EVs have become a threat to the U.S. auto industry, with the Alliance for American Manufacturing describing the challenge as "extinction-level."

China's surplus production capability is expected to result in 20 million excess EVs by 2025, based on projections from the China Center for Information Industry Development (CCID). This overcapacity has led to extremely competitive pricing for Chinese EVs, such as the BYD Seagull, which is priced significantly lower in Mexico compared to the cheapest EV available in the United States.

Nazak Nikakhtar, former assistant secretary for Industry and Analysis at the Department of Commerce during the Trump administration, highlighted that the issue with Chinese EVs is their impact on global markets rather than direct exports to the U.S.

The European Commission began an anti-subsidy investigation on Chinese EVs last October, and during her recent trip to China, Treasury Secretary Janet Yellen discussed the overcapacity issue, signaling new dialogues with China's Ministry of Finance.

In response to U.S. actions, Chinese media have launched coordinated criticisms, labeling concern over China's excessive production capacities as "protectionism."

Additional tariff increases announced by the Biden administration include new tariffs on Chinese port cranes and certain medical products, as well as significant hikes on Chinese lithium-ion batteries, steel and aluminum products, and semiconductors. These tariffs follow the "Section 301 tariffs" implemented by the Trump administration in 2020, which are up for review after four years as per the phase one trade agreement between the United States and China.

The administration has dismissed any claims that the decision to increase tariffs is election-related.

The Epoch Times Article