Expert Consultants in International Trade Economics.

Biden Raises Tariffs on Chinese Goods

This month, President Biden announced additional tariffs on products from China, including electric vehicles (EVs), semiconductors, and solar cells, among others. Part of the White House’s justification behind the tariffs – echoing Treasury Secretary Yellen’s comments in March – relates to China’s excess capacity in these sectors.

The tariff on EVs in particular will quadruple, from 25 to 100 percent. While the U.S. imports relatively few EVs from China, the latter’s global market presence is rapidly expanding. The chart at left demonstrates three observations. First, global trade in EVs is increasing at a brisk pace, with total exports tripling between 2020 and 2023. Second, China’s share of EV exports has grown from just 17 percent in 2020 to nearly half of the global market in 2023, while the U.S. share is shrinking. Third, the average price per unit of Chinese exports is nearly one-third that of the U.S. and roughly half that of the rest of the world’s. Although the figures in the chart may include several vehicles that are not cars (e.g. golf carts), it is nonetheless strongly indicative of China’s greatly expanding role as an exporter of low-priced EVs.