U.S. Tariffs on Chinese EVs – A Temporary Fix or Long-Term Gamble?

The U.S. government’s decision to slap a 100% tariff on Chinese electric vehicles—starting late September— and on the surface level it might seem like a bold move. But peel it back, and it gets a bit trickier. Even with these heavy tariffs, some of those Chinese models will be available in American showrooms at a lower price than what most U.S. manufacturers can offer. A head-scratcher, right? This highlights a real problem Washington is wrestling with: building up its own electric vehicle game… while China, for better or worse, is way ahead in this race.

This isn’t some sudden reaction. It comes after years of scrutiny into what the U.S. sees as unfair Chinese trade practices. So now, they’re raising the stakes. But—here’s the thing—America doesn’t really import that many EVs from China at the moment. This move feels more like hitting pause, a way to give American automakers some breathing room as they scramble to catch up. But is it enough?

The Biden administration locked in steep tariff hikes on Chinese imports, including a 100% duty on electric vehicles, to better protect strategic domestic industries from China’s state-driven overproduction https://t.co/vueTsP96zW pic.twitter.com/Xd0rJcB3gU

— Reuters (@Reuters) September 13, 2024

China’s been playing the long game when it comes to electric vehicles. Their production lines hum, their supply chains are vast, and they’ve been cranking out affordable EVs for years. BYD, one of China’s big players, can sell electric cars for as low as $12,000. Even with the new tariff, some of these vehicles will still come in under $25,000… which leaves U.S. automakers, who haven’t quite cracked the code on affordable EVs, in a tough spot. Tesla, for example, still doesn’t have anything near that price range.

It is not only about cars only, but it is about the whole system…a pattern…that the frustration in Washington is growing. From mines to factories they are effecting an impact on U. S automobile market.  Take batteries, for instance. They’re the beating heart of any electric vehicle, and right now, America’s heart is beating with China’s pulse. These batteries make up a huge chunk of the cost of an EV—around 30%. And while the U.S. is trying to shift gears and build its own battery supply chain, the reality is stark: America imported over $6 billion worth of Chinese-made batteries in the first half of 2023 alone. The administration is very aware of it and has rejected the idea of giving Chinese batteries a pass on the new tariffs.

The U.S. administration on Friday finalized sharp tariff hikes on some Chinese imports, including a 100 percent duty on electric vehicles (EVs), drawing harsh criticism from industrial insiders and experts https://t.co/xQcLf01pWE pic.twitter.com/gpuFgXlKbE

— China Xinhua News (@XHNews) September 15, 2024

The ripple effects are being felt across the auto industry. General Motors hit the brakes on its new battery plant in Indiana, pushing back the launch by a year. Panasonic, a Japanese company with big plans for EV batteries in North America, is also dialing back its production goals. The reason? The supply chain needed to fuel this industry just isn’t there… not yet, anyway.

China, of course, didn’t take this news sitting down. Their Commerce Ministry fired back, warning that the tariffs could shake up global supply chains and do nothing to fix the U.S.’s deeper economic issues. This is just one piece of a much larger puzzle—a trade battle with far-reaching consequences for industries on both sides of the Pacific.

US Locks In China Tariff Hikes on EVs, Chips, Steel
Sharp tariff hikes on imports from China, including a 100 percent duty on electric vehicles (EVs), will take effect on Sept. 27, the Biden administration confirmed on Friday. pic.twitter.com/IcjQgbqe8l

— Ernie (@beagleboyernie) September 15, 2024

So what to conclude… The U.S. is at a crossroads, trying to figure out how to improve its own electric vehicle production while reducing its dependence on Chinese goods. But the time is ticking, and without a more robust supply chain or affordable models hitting the market, the dream of an EV revolution in America might stay just that—a dream. The world, though, won’t wait.

Major Points

• U.S. imposes a 100% tariff on Chinese electric vehicles starting late September.
• Despite tariffs, Chinese models may still be cheaper than American alternatives.
• U.S. struggles to compete with China’s established EV production and pricing.
• Battery imports from China remain a major concern for the U.S. auto industry.
• Global supply chains face disruption, but the deeper trade issues remain unresolved.

Susan Guglielmo – Reprinted with permission of Whatfinger News