USA settles on import tariffs for Chinese electric vehicles

In a rather tight vote, which was decided 217 to 192, a bill was approved “to tighten the definition of Chinese components that make vehicles ineligible for U.S. EV tax credits.” A response from the Alliance for Automotive Innovation, which represents major OEMs such as General Motors and Toyota, has already complained, saying that the bill would “result in fewer vehicles qualifying and would mean aggressive rules on vehicle emissions and EV targets would need to be rolled back.” However, Group CEO John Bozzella also acknowledged that the protectionist measures would benefit the local EV environment: “[…]the automotive industrial base faces a serious economic and national security risk from China, the U.S. becomes less competitive, and the rug is pulled out from consumers.”

Incidentally, the bill was introduced by Ohio congresswoman Carol Miller, whose state is home to a growing e-mobility industry, from French company Forsee Power recently opening a new factory to Honda’s planned EV production hub in the state, Ohio is set to benefit significantly from the Biden administrations green investment plans.

Meanwhile, the White House has settled on its tariff hikes for Chinese imports, which will include a 100% duty on Chinese EVs, 50% on solar cells and 25% on steel, aluminium, EV batteries and key minerals. The new tariff is to go into effect on the 27th of September. A 25 % tariff will also go into effect for the batteries for other devices, including laptops and cell phones in January 2026.

“The 100% tariff on electric vehicles here does reflect the very significant unfair cost advantage that Chinese electric vehicles in particular are using to dominate car markets at a breathtaking pace in other parts of the world,” Lael Brainard, the top White House economic adviser said in an interview with Reuters. “That’s not going to take place here under the vice president’s and the president’s leadership.”

China had previously decried the tariffs as “bullying,” but has also started taking steps to protect its industry knowledge. The European Union is also planning to launch import tariffs against Chinese electric vehicle manufacturers, but is not quite as strict as the USA, even already considering softening the tariffs. Canada, on the other hand, is taking the same approach as the USA, with a 100% import tariff announced towards the end of August.

reuters.com (bill), reuters.com (tariffs)