US special tariffs on electric cars from China still behind schedule
Originally, the USA wanted to introduce the surcharges on imported electric cars from China on 1 August. However, two days before this date, the Office of the US Trade Representative announced that the special tariffs would be postponed and introduced in the course of August. Now, an official announcement consisting of just two sentences states that “USTR continues to work to finalize the determination, and we intend to make it public in the coming days.”
The reason for the postponement is the large number of comments received from the public consultation initiated by the US Trade Representative on the special tariffs in advance. His office announced at the end of July that 1,100 comments received still had to be examined. The new tariffs – not only on electric cars, but also on a range of other products from China – are then due to come into force around two weeks after the publication of the final decision.
The plan is to quadruple customs duties on electric vehicles from China from 25 per cent to 100 per cent, as previously reported. The duty rate for lithium-ion batteries for use in electric vehicles or individual battery components will be increased from 7.5 to 25 per cent. On 1 January 2026, a new duty rate of 25 per cent is also to be introduced on natural graphite, permanent magnets and, from 2024, on certain other critical materials. These areas all touch on the eMobility sector, and the USA is also introducing a number of other special tariffs in key areas, as mentioned above. The proposed tariff increases affect “products targeted by China for dominance, or are products in sectors where the United States has recently made significant investments,” summarises the Office of the Trade Representative.
In an earlier announcement by the office, the scope of the measures became clear: the tariff increases affect Chinese imported goods worth 18 billion dollars. According to the U.S. Census Bureau, lithium-ion batteries will make up the majority of this, accounting for 13.2 billion dollars of imports from China in 2023. However, this includes all types of batteries, not just those for electric vehicles.
Meanwhile, industry experts say that the massive tariff increase on electric cars from China will probably have “more political than practical effects.” This is because, given the existing tariffs, only a few Chinese electric vehicles have been imported before.
Meanwhile, Canada has announced that it will follow the example of the USA and impose additional import duties of 100 per cent on electric vehicles from China. These are to come into force on 1 October 2024 and, in addition to electric cars and plug-in hybrids, will also affect full hybrids manufactured in China. The European Union also has special tariffs in the pipeline, albeit somewhat more moderate than the North American states. The provisional surcharge amounts to a maximum of 46 per cent.
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