The United States intends to impose 100% tariffs on Chinese electric vehicles

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This is typical of protectionism.

According to the Global Times, a number of U.S. media have successively cited news that the Biden administration will announce additional tariffs on China as soon as next week, involving key areas such as electric vehicles, batteries and photovoltaics, among which the tariffs imposed on Chinese electric vehicles will rise to 100%.

The media quoted sources familiar with the matter as saying that the full announcement of the new tariffs on China will be announced as soon as the 14th. It is unclear exactly how much or what type of tariffs will be levied, but the Biden administration is said to have focused on strategic competition and national security. This is a decision made by the Biden administration after reviewing the previous administration's Section 301 tariffs on China.

Earlier, people familiar with the matter said the Biden administration was preparing to unveil a tariff measure targeting key strategic sectors in China as early as next week, which would impose new, targeted tariffs on industries including electric vehicles, batteries and solar equipment.

Two of the people familiar with the matter said that the U.S. government is expected to make an announcement on Tuesday (15th). In addition to imposing new tariffs on a number of key industries, the announcement will also largely maintain the existing tariffs on China. The specifics are unclear and the White House declined to comment.

The Associated Press, citing sources, reported that the Biden administration is focusing on industries "with strategic competition and national security domains." Under Biden's new plan, tariffs on Chinese EVs will quadruple from 25% to 100%. Previously, a number of congressmen from both parties pressured the White House to directly ban the import of Chinese electric vehicles.

The fact is that the tariffs imposed by the US Government on China have long made the US business circles dissatisfied. In March last year, the U.S. International Trade Commission also admitted that after an investigation, it was found that the Trump administration threatened to "make China pay", but it was actually U.S. importers and consumers who paid the price, and the import prices of U.S. companies and U.S. prices rose accordingly. This means that U.S. companies bear almost the entire cost of U.S. tariffs on China.

However, as China's electric vehicles, photovoltaics and other products sell well all over the world, in order to grab political benefits, the Biden administration began to play the idea of raising tariffs, and has made frequent moves since the end of last year.

In February, Biden issued a statement announcing that he would take "unprecedented action" to prevent Chinese connected cars and trucks, including electric vehicles, from entering the U.S. market. Some auto industry officials later revealed that the Biden administration was considering raising tariffs on Chinese electric vehicles. In April, the Biden administration announced that it would impose tariffs on Chinese steel and aluminum three times. At the same time, U.S. officials have been hyping up the topic of so-called "overcapacity" in China.

The Ministry of Foreign Affairs responded

According to reports, the Biden administration is preparing to announce a tariff measure against China as early as next week, which will impose new, targeted tariffs on industries including electric vehicles, batteries and solar equipment.

In this regard, Chinese Foreign Ministry spokesman Lin Jian said at a regular press conference that the previous US administration imposed Section 301 tariffs on China, which seriously interfered with the normal economic and trade exchanges between China and the United States, and has been ruled by the WTO to violate WTO rules. Instead of correcting its erroneous practices, the US side continues to politicize economic and trade issues and abuse the so-called Section 301 tariff review procedure to further increase tariffs.

Lin Jian said: We urge the US side to earnestly abide by WTO rules, cancel all tariffs imposed on China, and refrain from increasing tariffs. China will take all necessary measures to defend its rights and interests.

The China Association of Automobile Manufacturers responded

Today, Fu Bingfeng, executive vice president of the China Association of Automobile Manufacturers, said, "The U.S. exaggeration of overcapacity and so-called national security concerns about China's new energy vehicle industry is typical of trade protectionism." The new energy industry is co-created by human beings and can bring common benefits to mankind, but it is very unreasonable to have restricted access to the U.S. market. ”

In addition, the EU is also initiating a countervailing investigation into China's electric vehicles and considering imposing punitive tariffs.

There is no other reason, but also because European car companies think that they have caused harm to themselves. Under EU law, July 4, nine months after the EU launched the investigation, will be the deadline for the EU to introduce interim measures, including tariffs or quotas.

What do you think about the market outlook?

At present, the domestic new energy vehicle market is still "involuting", and car companies are aiming at overseas markets.

Judging from the data, although passenger car sales fell in April, there were no lack of bright spots. Among them, the national production of passenger cars hit a record high. In April, the national passenger car production was 1.988 million units, 18,000 units higher than the historical high in the same period in 2018, a record high.

New energy vehicles are still growing. According to the data, the retail sales of new energy passenger vehicles in April were 674,000, a year-on-year increase of 28.3%. The domestic retail penetration rate of new energy vehicles in April was 43.7%, an increase of 11.7 percentage points from the 32% penetration rate in the same period last year.

The growth rate of exports is greater than that of domestic sales. Vehicle exports in April totaled 504,000 units, up 0.4% m/m and 34% y/y. Vehicle exports from January to April totaled 1.827 million units, reflecting a 33.4% y/y increase.

In addition, the data showed that China's share of the global plug-in hybrid vehicle market rose to nearly 70% in the first quarter.

Some institutions said that it is expected that China's automobile exports to the EU are expected to increase by more than 20% in 2024; The ASEAN market has a good outlook, benefiting from the zero-tariff policy of Thailand, Indonesia and Malaysia, and is expected to maintain an export growth rate of 10~20% until 2025; In 2024, the export growth rate of Australia and South America may reach 20~30%; China's overall auto exports are expected to grow by 20% in 2024.

In addition, from the policy side, the Ministry of Commerce, the Ministry of Finance and other 7 departments jointly issued the "Implementation Rules for Automobile Trade-in Subsidy", which clarified the subsidy policy for automobile trade-in.

Cui Dongshu pointed out that with the implementation of the trade-in policy, it will have a significant positive impact on the auto market, and it is expected that the retail sales of the auto market in May will be better than in April.

Under the stimulation of the new policy, it is expected that the total annual scrapping of automobiles can reach the scale of nearly 10 million, and the car trade-in subsidy will bring millions of increments to the private new car consumption in the auto market, and can also bring more than 100 billion yuan of annual consumption increments.

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