The White House's decision on Tuesday to increase tariffs on Chinese electric vehicles (EVs) imports from some 25 percent to 100 percent risk hurting U.S. climate goals, industrial competitiveness and consumer interests, according to recent reports.
"U.S. consumers mostly haven't realized how good and how cheap Chinese-made EVs are, and the new tariff increase will stop them from doing so," said an article carried on Tuesday by Foreign Policy magazine. "After all, Americans will be slower about switching to EVs if they're left with costly options."
An analysis by The Economist magazine pointed out on Tuesday that "U.S. domestic producers may also feel less of an incentive to develop cheap goods in the long term, knowing that they are shielded from foreign competition ... Behind a 100 percent tariff wall, American officials and corporate bosses will have less urgency to come up with an answer."
"The Biden administration's plan to slap heavy new tariffs on Chinese electric vehicles and batteries would provide temporary protection for U.S. auto jobs, potentially at the expense of White House efforts to fight climate change by accelerating U.S. EV adoption," said a Reuters report published on Tuesday.
According to the report, industry executives and some analysts believed that a clean-technology trade war between the United States and China could also drive up the costs of EVs, batteries and other EV hardware, keeping overall EV prices high.
"If General Motors, Ford and Stellantis don't have to compete against foreign companies that make EVs, they won't make them. The market will go to (Chinese EV maker) BYD," said Daniel Becker of the Center for Biological Diversity, an environmental group that has pushed the Biden administration for stronger climate policies.
Placing 100 percent tariffs on Chinese cars, as the United States has just done, is a "huge trap," Carlos Tavares, CEO of the Stellantis automobile group said on French television.
"When you put a bubble around a market, whether it is the American market or the European market, the first thing you do is create massive inflation within the bubble," Tavares said.
"And when you create inflation, you hurt the purchasing power of the middle class and you accentuate the technological gap between those within the bubble and those outside who are busy conquering the world," he said.
