From September 27, the USA plans to impose some drastic tariffs on imported goods from China. Electric cars, for example, will be subject to 100 percent tariffs. Other products are also affected.
The US government has decided to significantly increase tariffs on Chinese imports to protect domestic industries. This includes a 100 percent tariff on Chinese electric vehicles, as the Reuters news agency learned today from the office of US Trade Representative Katherine Tai. 50 percent will be added to solar cells, and 25 percent each to steel, aluminum, batteries for electric vehicles and important minerals.
The tariff increases on a variety of Chinese products, announced in May, are set to come into effect on September 27. US Trade Representative Tai said in Washington that the tariff increases were aimed “at the harmful policies and practices of the People’s Republic of China that continue to impact American workers and businesses.”
Chinese suppliers with a big cost advantage?
According to White House chief economic adviser Lael Brainard, the measures are aimed at decoupling the US electric car industry from China’s dominant supply chain. Such “tough, targeted” tariffs are necessary to counter China’s state subsidy and technology transfer policies, which have led to overinvestment and excess production capacity.
However, the government in Washington itself is granting hundreds of billions of dollars in tax subsidies to strengthen the domestic electric car, solar and semiconductor sectors. “The 100 percent tariff on electric vehicles reflects the significant unfair cost advantage that Chinese manufacturers in particular are using to dominate the auto markets in other parts of the world at a breathtaking pace,” said Brainard. The US government will not allow that.
China has criticized the tariff increases as harassment and signaled retaliation. The success of the Chinese electric car industry is based on innovation and not on state support, Beijing said.
The higher US tariffs come into effect at a time when both Vice President Kamala Harris and former President Donald Trump are courting voters in the US auto and steel producing states. Both rivals are trying to position themselves as tough fighters against China ahead of the presidential election in November. Trump has promised to impose 60 percent tariffs on all Chinese imports.
The EU also wants to impose punitive tariffs
At the beginning of July, the EU also announced provisional punitive tariffs of up to 36.3 percent for electric cars from China. They will not be officially introduced until later. According to a Commission announcement in August, the additional tariffs could come into force at the end of October at the latest and apply for five years. During the transition period, companies do not yet have to pay the tariffs, but they do have to guarantee them. The EU Commission accuses China of illegal subsidies for its electric car manufacturers and fears damage to European suppliers such as company closures or layoffs.
According to a report by “Spiegel”, Tesla is cheating on the price increases because of the punitive tariffs. The US company has raised the price of its Model 3, which is produced in China, significantly more than the tariffs would justify, the magazine reports. According to the report, Tesla raised the price of its electric cars in Germany at the beginning of July and referred to the EU surcharges on imports. According to an initial announcement by the EU Commission in June, these were 21 percent.
However, Tesla subsequently negotiated with Brussels and the punitive tariff rate was reduced to eight percent. However, Tesla retained the previously imposed price increase, according to “Spiegel”.