US Delays Rocket-High Tariff Increase On Chinese EVs

The Biden administration has once again delayed the implementation of its rocket-high tariff against Chinese-made EVs. In a report by Automotive News, the US government was supposed to announce the final ruling for steep tariffs on August 31, 2024, but the US Trade Representative (USTR) said that it’s still in the process of crafting the final determinations for the tariff modifications, which were initially announced in May.

“USTR continues to develop the final determination regarding proposed modifications of the actions in the Section 301 investigation of the People’s Republic of China’s Acts, Policies, and Practices Related to Technology Transfer, Intellectual Property, and Innovation,” a spokesperson said in a statement. “As USTR continues this work, we expect to make the final determination public in the coming days.”

The Second Delay

In its initial announcement, the Biden administration was supposed to impose 100% tax duties on EVs (up from 27.5%), 50% on semiconductors and solar cells, and 25% on lithium-ion batteries and key minerals, steel and aluminum, ship-to-shore cranes and syringes to “protect American manufacturers from China’s unfair trade practices.” This will, of course, turn these Chinese-made products prohibitively expensive, discouraging American companies from doing business with Chinese companies.

The new tariffs were supposed to take effect on August 1, but the USTR announced on July 30 that the implementation would be deferred to sometime in September, with August 31 as the new deadline. The agency cited then that it needed time to assess more than 1,100 comments from the industry. Now, this second delay pushes the implementation to a new undisclosed date.

What’s Next?

It remains to be seen when the increased tariffs against Chinese-made products will be implemented or if the Biden Administration will ease its previous stand. In contrast, presidential candidate Donald Trump announced that he would impose a 60% tariff if he holds office, though he added that he’s in favor of Chinese EVs on American roads as long as they are made in America.

Chinese car brands aren’t the only ones affected by the said tariffs. Lotus has recently lowered its sales target for the year to 12,000 units (down from 55,000) due to the new tariff policies in the US and EU on Chinese-made EVs. Of note, Lotus and Volvo EVs, such as the Eletre and EX30, respectively, are made in China, with both companies currently under the corporate umbrella of Chinese automaker Geely. Ford, meanwhile, also appealed to the USTR about the 25% duty on graphite used in battery anodes, since EV battery makers are still too dependent on Chinese supplies.

Source:
Automotive News