Biden Boosts US EV Production: Tariffs Hike, Supply Chain Measures Announced
President Biden has announced a series of tariff hikes and supply chain measures aimed at boosting the production of electric vehicles (EVs) in the US by union workers while adhering to international trade laws. The moves, which include increasing tariffs on lithium batteries and other critical minerals, have sparked reactions from both US and Chinese industries.
The new tariffs, which have increased from 7.5% to 25%, will affect US automotive manufacturers such as General Motors and Ford. These companies have been granted temporary tariff exemptions and are now working to adapt their supply chains to increase domestic production. Carmakers and suppliers across the US are reviewing the potential impact of these changes on their operations.
President Biden's speech highlighted the unfair competition faced by American workers due to Chinese government subsidies in various industries. Brian Gu, co-president of Chinese EV maker Xpeng, expressed concern that the tariffs would hinder the global transition to carbon neutrality and green energy.
In response to the US tariffs, China's Ministry of Commerce has threatened resolute measures to safeguard its rights and interests. The US, meanwhile, has accused the Chinese government of subsidising steel and aluminium, semiconductors, EVs, and solar panels, leading to excess production and unfairly low prices.
The tariff on battery EVs from China has been increased from 25% to 100%, totaling 102.5%, although imports are small. The Motor and Equipment Manufacturers Association (Mema) supports the tariff updates, aiming to reduce dependency on foreign sources and strengthen the local supply chain.
President Biden's determination to make the future of EVs in America by union workers has led to significant changes in US trade policies. While these measures aim to level the playing field for American workers and strengthen domestic supply chains, they have also sparked reactions from both US and Chinese industries. The full impact of these tariff updates and supply chain adaptations remains to be seen.
