October 12, 2024
U.S. Lawmakers Look To Raise Tariffs On Chinese Made Autos
By Staff Writer
November 08, 2023
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The Wuling Air EV, built by a joint venture between the Chinese automaker SAIC and General Motors, retails for around $10,000 USD in China and Indonesia. U.S Auto experts say inexpensive Chinese EVs are set to arrive in the competitive American market in the not too distant future as Chinese automakers consider building factories in Mexico, to build cars for the US market and bypass high tariffs.
Representatives Mike Gallagher (R-WI), and Raja Krishnamoorthi (D-IL), along with two other lawmakers, urged U.S. Trade Representative Katherine Tai to boost the current 25% tariff on Chinese vehicles. "It is critical that tariffs on (Chinese) automobiles not only be maintained but also increased to stem the expected surge in imports," they wrote in the letter.
The bipartisan group of U.S. lawmakers also wants the White House to investigate taking steps to prevent Chinese companies from exporting to the United States from Mexico. The letter reveal comes on the heels of House Republicans, including Rep. Gallagher, who chairs the select China committee, introducing a bill on Nov. 2 that would bar electric vehicle battery and other energy companies with connections to “Foreign Entities of Concern'' (FEOC) such as China and Russia from securing tax incentives tied to the Inflation Reduction Act. Some Chinese car companies such as Chery, SAIC Motors, and BYD are looking to build plants in Mexico.
The 30D tax credit can provide up to a $7,500 rebate on new EVs and up to a $3,500 rebate on used EVs. These tax rebates will soon be available at the dealer level when a customer buys an EV. Eligible EVs must meet certain material and mineral requirements to be eligible for the 30D tax credit, beginning with a threshold requirement that a vehicle is assembled in North America, followed by caps on price and buyer income; $3,750 of the tax credit is based upon the vehicle having at least 40% of its battery critical minerals from the United States or countries with a free trade agreement with the United States. The other $3,750 of the tax credit is based on at least 50% of the battery components of the vehicle coming from the United States or countries with a free trade agreement with the U.S.
The U.S. Treasury Department has not yet released guidance interpreting the FEOC definition that would inform which U.S. subsidiaries of Chinese corporations would qualify as an FEOC or which services agreements, like the one Ford announced with Chinese battery maker CATL, would qualify.
In September, following a probe launched in July 2023 by two House committees, Ford stopped work at its $3.5 billion factory in Marshall, Mich., that was supposed to make cheaper lithium iron phosphate batteries using tech from CATL.
