The United States increased duties on electric cars from China from 25 to 102%. Experts fear a boomerang effect (1 photo)

The US President announced an increase in import duties on a number of goods from China. The main increase affected electric vehicles: the tariff increased from 25 to 102%. Thus, the country's authorities actually banned Chinese companies from legal activities in the local market. China has already announced its readiness to strike back. Experts believe that the protectionist measure could also affect American manufacturers.



The US President explained the sharp turn in customs policy with the desire to protect American automakers from unfair competition. The potential expansion of cheap Chinese electric cars into the country could threaten the entire industry, which would affect the economy in general and the lives of factory workers in particular. In addition, the country's authorities have already announced the probable threat to cybersecurity posed by machines from China. Finally, the protectionist measure should act as a means of protecting the financial investments with which the country stimulates local production and sales of electric cars.

Experts fear that China will introduce symmetrical retaliatory measures, and this will negatively affect the state of the American economy. Many local automakers are present in the Chinese market, for example Chevrolet and Cadillac, and for Buick the Chinese market has generally become the main one. A trade war could also affect companies that at first glance have nothing to do with the conflict, for example, Mercedes-Benz, which supplies electric cars assembled at an American plant to China. Another unobvious consequence of this policy is the rise in prices for electric cars assembled in the USA, which will no longer be restrained by alternative offers.

However, other experts call Biden’s move rather political. In a situation where the actual volume of exports of electric vehicles from China is extremely low, it should strengthen the position of the incumbent president against the backdrop of the upcoming elections in November.

With the same motivation - to protect against unfair competition - import duties on lithium-ion batteries increased from 7.5 to 25%. US authorities have said that China controls up to 90% of critical resources, which creates unacceptable risks for US supply chains and, as a result, economic security.

The main US industry union, the United Auto Workers, has already supported Biden. Meanwhile, the heads of a number of automobile companies, in particular BMW and Stellantis, previously made statements that such practices do not contribute to fair competition and a free market. In turn, the Beijing Foreign Ministry said that rising tariffs would negatively affect the atmosphere of bilateral cooperation. The department called on the United States to cancel additional duties and reserved the right to take retaliatory measures to protect the rights and interests of the country.