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U.S. considers raising tariffs on China EVs

December 21, 2023 8:12 AM

The Wall Street Journal reports Wednesday that, citing unnamed sources familiar with the matter, that the United States is in discussions and may choose to increase tariffs on some Chinese goods, including electric vehicles (EVs).

In recent years, the growth of China's vehicle exports has been driven by excess production capacity and a decline in domestic demand within the world's largest automotive market. Projections from China Merchants Bank International suggest a 25% increase next year, reaching 5.3 million units.

Following a request from a bipartisan group of U.S. lawmakers to the administration last month, a report in The Journal highlighted discussions about raising tariffs on vehicles made in China and exploring methods to prevent Chinese companies from exporting vehicles to the United States through Mexico.

Chinese vehicles entering the United States currently face a 25% tariff implemented by former President Donald.

There is an ongoing debate within the U.S. government regarding the Trump-era tariffs on approximately $300 billion worth of Chinese goods. Plans are underway to conclude a comprehensive review of these tariffs early next year, as reported by the paper.

The Biden administration is considering a reduction in tariffs on certain Chinese consumer goods that officials do not view as critical from a strategic standpoint. This move is being considered alongside the possibility of raising tariffs on clean-energy products, according to the report.

Notably, foreign automakers, including Tesla (NASDAQ: TSLA), heavily rely on China as a key export center.

Previous statements from lawmakers suggested that U.S. automakers are importing vehicles manufactured in China to the United States, signaling a belief that the existing import tariffs are inadequate.

A spokesperson from China's foreign ministry stated during a daily briefing on Thursday that China will closely monitor unfolding developments and will implement necessary measures to protect its legitimate interests.

By Michael Elkins | [email protected]

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