The US Government has decided upon a massive increase on the tariffs for the importation of Chinese made EV’s following a review of those tariffs originally imposed by Donald Trump. Observers first thought that the review would lower the tariffs in an attempt to reign in the massive inflation in the US, but this is an election year and car manufacturing jobs in key battle ground states are at risk. The announcement will be made today and word is that the rate will be quadrupled to an eye watering 102.5%! The new tariff will also be applied against batteries and solar panels.
Biden is clearly just trying to steal Mr Trumps thunder, who had announced a 60% tariff upon his return to the White House in November of this year.
The US is trying to persuade the public that EV’s are the way to go but to date the American Public are just not convinced and sales are faltering. The problem with this new move to protect jobs in the heartland of Democratic Party Support is that it will only make things more expensive, thus less attractive, and may well end up back-firing for the US public and the decarbonising lobby. Almost as perversely the move may make Chinese EV’s even cheaper in the rest of the world.
The US has invested massive amounts of money into the domestic development of EV’s with mixed results just as China has ramped up production, typically the Chinese cars are more affordable and have more features than their US counterparts.
Currently China is unleashing a new wave of de-industrialisation on the more developed world and it is frightening politicians. Political leaders are wary of losing manufacturing jobs. It is estimated that that 1 million Americans lost their jobs due to competition with Chines companies between 1997 and 2011, and no-one seems to want a repeat of that.
It may be too little too late though. Last year Chinese companies claim to have shipped 5 million cars making them the biggest in the world. BYD shipped 500k in the fourth quarter alone which left Tesla trailing in the dust. The cars are simply more focused on the comfort in the cabin =, oh and they are cheap in comparison even if they are probably nowhere as well built (for now). With the clarion call of world decarbonisation their appeal and dominance will surely grow, some analysts are predicting 30% of world passenger car volume.
Politicians are pinning the blame firmly on Chinese foul play with massive subsidies artificially lowering the cost of production. Since 2014 the Chinese Government has showered handouts onto its car manufacturers in the form of cash injections, purchase subsidies and government contracts. In the murky world of Chinese Politics, it is hard to get a true figure on how much this is worth but some estimates put this as high as 30% and don’t get me started on the wholesale theft of technology from joint ventures with western car manufacturers and the worlds battery makers.
I am usually an advocate for an open market leading to innovation and better consumer choice. In this case though I do not like the idea that a totalitarian regime has ridden rough shode through all of the norms of a free market and are now equipping cars with the sort of surveillance technology that could be turned on us in a heartbeat. I also think allowing the world to become dependent on batteries from the Peoples Republic is ill-advised.
There is also the part of me that says if I can drive a car subsidised by Chinese tax Money then what the heck!
