By the SEMA Washington, D.C., office
The Biden Administration recently announced tariff increases on Chinese products in response to China's unfair trade practices concerning technology transfer, intellectual property and innovation. The U.S. Trade Representative (USTR) increased tariffs on $18 billion of imports from China, including on electric vehicles (EVs), semiconductors, steel, aluminum, solar panels and medical equipment.
The Administration has increased tariffs by nearly 400%--from 25% to 102.5%--on any imported Chinese EVs to aid American auto manufacturers in remaining competitive, protecting domestic jobs and national security. According to the findings of a four-year review of trade with China, the tax rate on imported Chinese EVs will rise to 102.5% this year, up from the total level of 27.5%. The review was undertaken under Section 301 of the Trade Act of 1974, allowing the government to retaliate against unfair trade practices or violations of global standards.
Under the 301 guidelines, the tariff rate on the following products will also increase:
- Solar cell imports will double to 50% this year.
- Chinese steel and aluminum products will climb from 0 to 7.5% to 25% this year.
- Computer chip tariffs will double to 50% by 2025.
- Lithium-ion EV batteries will increase from 7.5% to 25% this year, and tariffs for non-EV batteries will increase from 7.5% to 25% in 2026.
- Higher tariffs will also be applied to ship-to-shore cranes, critical minerals and medical products.
The Administration's announcement of increased tariffs comes on the heels of the Department of Treasury finalizing a rule implementing the 30D Clean Vehicle Credit for electric vehicles from the Inflation Reduction Act. Critics on Capitol Hill have introduced a bipartisan Congressional Review Act (CRA) resolution of disapproval to overturn the rule that would allow the $3,750 EV battery minerals credit to continue to use the 50% roll-up of materials from Foreign Entity of Concern (FEOC) such as China as a transition rule until 2027. The CRA is led by Senators Joe Manchin (D-WV), Deb Fischer (R-NE), Sherrod Brown (D-OH), Marco Rubio (R-FL), Lisa Murkowski (R-AK) and Mike Braun (R-IN). Representatives Carol Miller (R-WV) and Jared Golden (D-ME) are introducing a companion resolution in the House of Representatives.
SEMA has previously reported on findings that similar tariffs caused economic harm and will continue to monitor any changes that may arise.
For more information, contact Tiffany Cipoletti at tiffanyc@sema.org.