A bipartisan group of U.S. lawmakers is calling on the Biden administration to increase tariffs on Chinese-made vehicles and take measures to prevent Chinese companies from using Mexico as an export gateway to the United States. In a letter addressed to U.S. Trade Representative Katherine Tai, Representative Mike Gallagher, a Republican who chairs a select committee on China, along with the committee’s top Democrat, Raja Krishnamoorthi, and Michigan Representatives Haley Stevens and John Moolenaar expressed their concerns.

The lawmakers are advocating for an adjustment to the existing 25% tariff on Chinese vehicles, emphasizing the importance of not only maintaining but raising these tariffs to counter the expected surge in Chinese imports. This tariff, initially imposed during the administration of former President Donald Trump, was subsequently extended by the Biden administration.

The letter further suggests that the U.S. Trade Representative should consider initiating a new Section 301 investigation into Chinese vehicles. This investigation would assess the potential harm posed to the American automotive industry and its workforce and determine the necessary actions to counter China’s industrial strategy aimed at dominating the global automobile market.

The lawmakers also highlight the need to be prepared for the growing influx of Chinese vehicles exported from other trading partners, particularly Mexico. They argue that Chinese automakers are strategically establishing operations outside China to take advantage of preferential access to the U.S. market through existing free trade agreements.

This call for increased tariffs and investigations is rooted in concerns raised by automakers in the United States. The Alliance for Automotive Innovation CEO, John Bozzella, had previously warned that proposed U.S. environmental regulations could provide China with a stronger foothold in America’s electric vehicle battery supply chain and the automotive market.

In a similar vein, the European Commission had initiated an investigation into imposing punitive tariffs to safeguard European Union producers against cheaper Chinese electric vehicle (EV) imports. The U.S. lawmakers believe that collaboration with allies is essential to formulate a coordinated response that collectively mitigates the demand for these vehicles in their respective markets.

The letter also highlights the fact that many of the electric vehicles (EVs) exported from China are produced by Western brands like Tesla, which have substantial manufacturing capacity in China. Furthermore, the lawmakers note that some U.S. automakers are themselves importing Chinese-made vehicles into the United States, underscoring their belief that the existing tariff level on imported vehicles is insufficient.

Source: Reuters