The Biden government wants to add big new taxes on electric cars, computer chips, solar panels, and medical supplies that come from China. This is according to a US official and someone else who knows about the plan.
Taxes on electric cars might go up four times from 25% to 100%. The people talked about the plan but wanted to stay anonymous because they weren’t allowed to give details before it was officially announced.
The taxes will be revealed on Tuesday. The Democratic administration is upset with China for making too many EVs and other products, which they think is a danger to US jobs and security.
Rich countries like the United States and Europe are worried that a lot of cheap stuff from China will take over their own factories. The US is worried that China’s green energy products will hurt the big investments made in green energy by the Democrats’ Inflation Reduction Act signed by President Joe Biden in August 2022.
The extra taxes also have some political power as we head into the November election for president. Both Biden and Trump have said they will be strong when dealing with China, which is the second largest economy in the world and a rising rival to the United States.
Biden wants to compete with China, not fight with them. He wants to use government money to help businesses build new factories and technology, but he also wants to limit what we sell to China.
Trump wants to put big taxes on things from China to make the US sell more to China than it buys from there. He keeps saying that Biden’s support for electric vehicles will make American factory jobs move to China.
Tuesday’s announcement will likely keep some taxes that were put in place during Trump’s time in office on around US$360 billion worth of things from China. The new tax on imports would make products like syringes from China and solar equipment more expensive.
There is a chance that taxes could cause a bigger fight over trading between the two countries as they react to each other’s actions. China wants to be better at using technology and make more money.
China is making fewer lithium-ion batteries for electric vehicles, cell phones, and other electronic devices. This is happening as China is getting more criticism from Western countries.
China’s Ministry of Industry and Information Technology made a new rule to better manage the lithium-ion battery industry and improve its quality.
A document was put on the ministry’s website for people to give their thoughts on. It says that companies should focus on making better technology, improving quality, and reducing costs instead of making their business bigger.
The draft says that lithium battery plants that are built in farmlands or industrial areas where building is limited should be closed.
Katherine Tai, who represents US trade, is reviewing the tariffs put in place during the Trump administration. Republican lawmakers, Jason Smith and Adrian Smith, are pushing for the review to be finished quickly.
“They wrote a letter to Tai this week saying that if the four year review is not done soon, it could cause big problems for US farmers, manufacturers, innovators, small businesses and workers. ”
Ohio Senator Sherrod Brown tweeted on Friday that tariffs alone are not sufficient. We must stop Chinese electric cars from being sold in the United States. “Full stop”
The Biden government will look into Chinese-made “smart cars” that can collect private information about the people driving them. In February, the Commerce Department said they are investigating if “connected vehicles” from China and other unfriendly countries could be a threat to our national security.
Not many Chinese electric cars are in the US right now. But officials are concerned that cheap models might come into the US soon, even with a 25% tariff.
A new car made by a Chinese company called BYD came out last year. It costs about $12,000 in China. The car’s quality is as good as expensive US-made electric cars, and it’s making the US car industry worried.
The Alliance for American Manufacturing, which is made up of businesses and the US Steelworkers union, shared a report in February. It said that bringing cheap cars from China to the US could seriously hurt the US auto industry. The report also said that the US auto industry makes up 3% of the country’s economy.
Janet Yellen, the person in charge of the money in the US government, visited China in April. She talked about how the Chinese government gives money to companies that make electric cars, their batteries, and solar energy equipment. The US government also wants to help these industries grow in America.
“China is now too big for the rest of the world to handle its large capacity. ” She said that the things China does today can change prices all over the world.
“When a lot of low-cost products from China are sold in the global market, it makes it harder for American and other foreign companies to stay in business. ”
According to Bloomberg News and The Wall Street Journal, there is a plan for new tariffs.