U.S. Vows to Propel Success of Homegrown EV Manufacturers as China Ramps Up Exports, Yellen Asserts
In Elizabethtown, Kentucky, on March 13, U.S. Treasury Secretary Janet Yellen addressed concerns about China’s dominance in the electric vehicle (EV) industry and outlined measures taken by President Joe Biden’s administration to bolster the domestic EV sector. Yellen’s remarks came amidst China’s significant exports in the EV market, supported by substantial government subsidies.
Responding to inquiries about potential tariffs on Chinese EVs, Yellen emphasized President Biden’s commitment to fostering the success of the U.S. EV industry. She highlighted the administration’s dedication to ensuring competitiveness against China’s aggressive export strategies. Notably, the U.S. is wary of China’s increasing EV exports to global markets, fearing potential repercussions for American automakers, analogous to the adverse effects experienced by U.S. metals producers due to China’s excess capacity in steel and aluminum.
Former President Donald Trump had previously imposed tariffs of 25% on all Chinese vehicles, effectively preventing Chinese EVs from penetrating the U.S. market. However, China’s leading EV manufacturer, BYD, has begun exporting to Mexico and is considering establishing a factory there. Some U.S. senators have advocated for heightened tariffs on Chinese EVs to protect domestic interests further.
The U.S. Commerce Department initiated an investigation into whether Chinese vehicle imports pose national security risks due to data transmission, potentially leading to additional restrictions on both EVs and conventional vehicles. Additionally, the ongoing review of Trump-era tariffs on Chinese imports by the U.S. Trade Representative’s office offers another avenue for potentially imposing higher trade barriers on Chinese EVs.
Yellen and other administration officials have stressed the importance of making trade policies, including the “Section 301” tariffs, more strategic to safeguard industries vital to U.S. economic security while minimizing costs elsewhere. While acknowledging China’s substantial investments in the EV industry, Yellen did not provide specific details on the actions being taken by the United States to ensure the success of its own EV sector.
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