The US is considering raising tariffs on Chinese electric vehicles (EV) and other goods as it tries to limit reliance on Asia’s biggest economy and shield its own green industry, the Wall Street Journal reported yesterday, citing people it did not identify.
While officials in US President Joe Biden’s administration have largely left in place former US president Donald Trump-era tariffs on about US$300 billion of Chinese goods, the White House and US agencies are debating the levies again, the sources said, with an eye on completing a review of the tariffs early in the new year.
Chinese EVs are subject to a 25 percent levy in the US, limiting their ability to enter the market. BYD Co (比亞迪), for example, does not retail its passenger vehicles in North America — despite being on the cusp of overtaking Elon Musk’s Tesla Inc as the world’s biggest seller of EVs.
Photo: EPA-EFE / Rungroj Yongrit
Raising those EV tariffs would therefore likely have little immediate impact on US consumers, the Journal reported.
Asked about the report, a Chinese Ministry of Foreign Affairs spokesman told reporters that tariffs “violate the principles of market economy and fair competition and undermine the security of the global industrial supply chain.”
“China firmly opposes this and urges the US side to abide by the WTO rules and provide a fair, just and nondiscriminatory business environment,” Chinese Ministry of Foreign Affairs spokesman Wang Wenbin (汪文斌) said at a regular press briefing, describing such measures as “protectionism.”
If the tariffs are raised, it would “limit access to affordable EVs and components, which will reduce the potential for scaling this technology,” said Bill Russo, founder and CEO of Shanghai-based advisory firm Automobility Ltd.
Even so, there has been increased political pressure in recent weeks in the US to ramp up tariffs against China. A bipartisan group of lawmakers earlier this month recommended raising tariffs on goods from China and further restricting investment into the country. US Senator Lindsey Graham on Wednesday said he would help draft sanctions “from hell” to impose on China if Beijing tried invading Taiwan.
The US is also gearing up for a presidential election next year, which might further fuel political tensions involving China. The Republican frontrunner is Trump, who launched the trade war during his tenure as he argued that Beijing had taken advantage of the US.
“Ahead of a presidential election, no candidate of any party loses votes by sounding tough on China trade,” ING Groep NV Asia-Pacific research head Robert Carnell said.
Increasing tensions over trade could hurt the recovery in China’s yuan, which is among the worst-performing currencies in Asia this year. The offshore yuan pared its gains after the Journal report, and was little changed against the US dollar at 7.1484 yuan.
“Overall, it seems not to be a broad-based tariff hike, and the impact on the yuan and broader Chinese markets should be limited,” Mizuho Bank Ltd chief Asian foreign exchange strategist Ken Cheung (張建泰) said. “The tariffs news is only in discussion so far.”
Other targets for potential tariff-rate increases are Chinese solar cell products and EV battery packs, sources familiar with the matter told the Journal.
While the US primarily imports solar cell material from Southeast Asia, China is still a huge supplier of EV batteries. Contemporary Amperex Technology Co Ltd (寧德時代), based in Ningde, Fujian Province, is the world’s biggest maker of EV batteries.
The Biden administration is also considering lowering tariffs on some Chinese consumer products that officials do not see as strategically important, the Journal said.
Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) yesterday obtained the government’s approval to inject an additional US$7.5 billion into its US subsidiary, the Department of Investment Review said in a statement. The department approved TSMC’s application of investing in TSMC Arizona Corp, which is engaged in the manufacturing, sales, testing and design of IC and other semiconductor devices, it said. The latest capital injection follows a US$5 billion investment for TSMC Arizona approved in June. The chipmaker has broken ground on two advanced fabs in Arizona with aggregated investments approved by the department totaling US$24 billion thus far. According to TSMC, the first Arizona
The lethal hack of Hezbollah’s Asian-branded pagers and walkie-talkies has sparked an intense search for the devices’ path, revealing a murky market for older technologies where buyers might have few assurances about what they are getting. While supply chains and distribution channels for higher-margin and newer products are tightly managed, that is not the case for older electronics from Asia where counterfeiting, surplus inventories and complex contract manufacturing deals can sometimes make it impossible to identify the source of a product, analysts and consultants say. The response from the companies at the center of the booby-trapped gadgets that killed 37
FRIENDLY TAKEOVER: While Qualcomm Inc’s proposal to buy some or all of Intel raises the prospect of other competitors, Broadcom Inc is staying on the sidelines Qualcomm Inc has approached Intel Corp to discuss a potential acquisition of the struggling chipmaker, people with knowledge of the matter said, raising the prospect of one of the biggest-ever merger and acquisition deals. California-based Qualcomm proposed a friendly takeover for Intel in recent days, said the sources, who asked not to be identified discussing confidential information. The proposal is for all of the chipmaker, although Qualcomm has not ruled out buying some parts of Intel and selling off others. It is uncertain whether the initial approach would lead to an agreement and any deal is likely to come under close antitrust scrutiny
SECURITY CONCERNS: The proposed ban on Chinese autonomous vehicle software and hardware would go into effect with the 2027 and 2030 model years respectively The US Department of Commerce today is expected to propose prohibiting Chinese software and hardware in connected and autonomous vehicles on US roads due to national security concerns, two sources said. US President Joe Biden’s administration has raised concerns about the collection of data by Chinese companies on US drivers and infrastructure as well as the potential foreign manipulation of vehicles connected to the Internet and navigation systems. The proposed regulation would ban the import and sale of vehicles from China with key communications or automated driving system software or hardware, said the two sources, who declined to be identified because the