US to expand China trade levies with focus on EVs

Joe Biden is expected to announce fresh tariffs on Chinese trade, with levies focused on strategic sectors including electric vehicles, in a review of measures first put in place under Donald Trump.

An announcement planned for Tuesday will keep the blanket tax rises introduced by the president’s predecessor but supplement them with targeted levies on industries connected to EVs, including batteries and solar cells, according to reports.

The plan, first reported by Bloomberg, would be the culmination of a review of sweeping tariffs on Beijing that began in 2018. During his presidency, Trump imposed a 27.5% tax on imports of Chinese EVs that Biden has since extended, which has kept the number of Chinese-made cars on US roads extremely low.

If introduced, the EV tariffs would represent one of Biden’s biggest moves in the trade war with China. Last month he launched an investigation into the Chinese shipping industry and called for higher levies on Chinese steel and aluminium in an appeal to union workers before the presidential election in November.

While China does not directly sell EVs in the US, it has majority stakes in other overseas businesses that sell Chinese-made cars. China has the ability to undercut American manufacturers on price, while including more powerful batteries and advanced technology. The Alliance for American Manufacturing has said the introduction of Chinese cars to the US market would be an “extinction-level event” for US carmakers.

The EU and the US are reeling from a deluge of cheaper imports from China off the back of President Xi Jinping’s strategy to step up manufacturing to reboot the economy.

Restrictions on Chinese “smart cars” would also address security concerns. The White House has said cars connected to the internet could be hacked, with cameras and sensors used to collect details on and interact with critical infrastructure.

In March, Trump said that if elected as president he would put a 100% tariff on “every single car that comes across the line” from Chinese-owned manufacturing plants in China.

Last month Biden said he was “not looking for a fight” but the US needed to stand up to “unfair economic practices and industrial overcapacity”.

“I’m looking for competition, but fair competition,” he said.

The White House did not respond to a request for comment.