Why Biden Is Taking a Hard Line on Chinese EVs

The Biden Administration has announced new tariffs on Tuesday for Chinese made electric vehicles, quadrupling the current tariff from 27.5% to 102.5%, as well as new tariffs on solar cells, steel, and aluminum.

These tariffs are expected to raise $18 billion in imports from China.

Currently, China exports very few electric vehicles to the U.S., so it is unlikely that the tariffs will have much of an impact in the short run. In the first quarter of 2024, only one Chinese car maker, Geely, exported EVs to the U.S. and it represented less than 1% of the market share. 

Nevertheless, the Biden Administration says that it worries that in the long run, China’s subsidies of its electric vehicle industry could lead it to claim a larger proportion of the market share. “When the global market is flooded by artificially cheap Chinese products, the viability of American and other foreign firms is put into question,” Treasury Secretary Janet Yellen said during a speech she gave while she visited Beijing in April. 

Since coming into office, President Joe Biden has left the tariffs Trump put in place on China intact, as part of a bid to encourage more American manufacturing. On a Monday call with reporters, Lael Brainard, director of the White House National Economic Council, said that the tariffs would help manufacturing workers in Pennsylvania and Michigan by ensuring that “historic investments in jobs spurred by President Biden’s actions are not undercut by a flood of unfairly underpriced exports from China.”

Some observers have suggested that the tariffs are an attempt to get ahead of Donald Trump, who has expressed support for an across-the-board levy of 60% or more on all Chinese goods.

The announcement also comes during an election year during which tensions between the U.S. and China are very high. Over 83% of Americans have an unfavorable view of China, according to a survey conducted by the Pew Research Center in 2023.

Beijing has responded saying that the new tariffs are in violation of the World Trade Organization’s rules. “Section 301 tariffs imposed by the former US administration on China have severely disrupted normal trade and economic exchanges between China and the US. The WTO has already ruled those tariffs against WTO rules,” said Lin Jian, a Chinese Foreign Ministry spokesperson in a conversation with reporters on Friday.

Ahead of the announcement, senior U.S. officials denied the tariffs are related to the presidential election, the Financial Times reported. “This has nothing to do with politics,” one official said.