President Joe Biden has announced new tariffs on $18 billion worth of Chinese goods, with a focus on electric vehicles. The latest round of tariffs includes a 100% tax on Chinese-made electric vehicles, as well as lithium batteries, solar cells, and semiconductors. These measures are intended to protect the US auto industry from potential competition from cheap Chinese electric vehicles.
The increase in tariffs on Chinese EVs from 25% to 100% is seen as a move to prevent Chinese automakers from setting up operations in the US. This decision comes as companies like BYD are expanding their plans to export vehicles to countries outside of China due to intense competition in the domestic market. Reports of Chinese automakers planning to build factories in Mexico have raised concerns among US lawmakers about these companies gaining access to the US market through a “backdoor.”
While the latest round of tariffs is not as extensive as those proposed by Donald Trump, they still cover a range of products including steel, aluminum, and medical supplies like face masks and respirators. Trump had previously suggested a 60% tax on all Chinese imports if re-elected as president in November. The tension between the US and China over trade issues continues to escalate with these new tariffs.
Meanwhile, some experts see these tariffs as short-sighted and may ultimately harm American consumers. They argue that increasing taxes on imported goods can lead to higher prices for consumers, especially during times of economic uncertainty like we’re currently experiencing with the COVID-19 pandemic.
Overall, while these tariffs may provide temporary protection for the US auto industry, they also risk creating long-term consequences for both American businesses and consumers alike. As tensions between the two superpowers continue to simmer, it remains to be seen how this trade war will ultimately play out.
