The federal administration is poised to announce a series of new tariffs on goods imported from China, and battery electric cars will reportedly be a priority. A source with knowledge of the import tariff discussions said President Joe Biden’s government could announce the new levies as soon as this week, giving American automakers a reprieve from the stiff competition they would face if Chinese-made electric cars entered the U.S. market.
Furthermore, Biden will be retaining the Chinese import tariffs originally introduced by the Trump administration as relations between China and the U.S. remain tense. The two countries have been stuck in a trade war that has seen both nations restrict or outright ban the export of critical resources to each other.
Now that Chinese carmakers have leveraged government subsidies to develop cheap but relatively high-quality electric cars, U.S. officials are desperate to keep affordable electric cars from China from entering the country and outcompeting U.S. carmakers such as Ford. Since he took over from former President Donald Trump, Biden has retained Trump’s import tariffs and slapped around $370 billion worth of import duties annually on Chinese imports. Moving forward, the current administration will keep the former administration’s tariffs in place and add a series of items with strategic interest to the list of items with import tariffs.
The new items on the list are related to manufacturing, technology and climate change, the source revealed, and are largely covered by the Chips and Science Act as well as the 2022 Inflation Reduction Act, which provided hundreds of billions of dollars to help boost America’s domestic semiconductor and clean-energy segments.
During a visit to Wilmington, North Carolina, Biden said that he hopes people will feel the same sense of pride in their hometowns that he does and look forward to their comebacks once work on the new semiconductor and climate projects begins. America’s auto sector was responsible for improving the livelihoods of millions of people in the past several decades, but as manufacturing moved to foreign markets such as China where costs were significantly lower, regions that relied on car manufacturing lost their main source of revenue.
The current administration plans to ensure these regions aren’t left behind in the transition to clean-energy and electric vehicles. As such, Biden’s message will most likely resonate with states such as Michigan, Pennsylvania and Wisconsin, which suffered significant job losses when America exported its manufacturing. Alongside building the country’s green-energy infrastructure, Biden also plans to return America’s long-lost manufacturing jobs and not just in the auto sector.
When he visited Pittsburgh in April, Biden told United Steelworkers union members that more than 14,000 steelworkers from Ohio and Pennsylvania lost their jobs between 2000 and 2010. He said that he wanted to increase the tariffs levied on Chinese aluminum and steel imports and assured the union members such a job loss wouldn’t happen on his watch.
Entities such as Cenntro Electric Group Ltd. (NASDAQ: CENN) are likely to follow these tax policy developments in the U.S. to see if imports from EV companies headquartered outside the U.S. could also eventually also be impacted.
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