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The measure, seen by some as political, is intended to protect American manufacturers from Chinese brands engaging in “unfair trade practices.” This means government subsidies, which in China take unimaginable forms. To reduce the price, the local government even gives incentives for the purchase of raw materials. In addition to electric cars themselves, lithium-ion batteries will also be subject to increased duties from 2024.

US President Joe Biden announced significant tariff increases on a range of imported goods from China, totaling $18 billion. The list includes steel, aluminum, semiconductors, batteries and battery components, as well as photovoltaic cells and electric vehicles. The goal of the protective measures is declared to be the fight against “unfair trade practices,” which apparently refers to the Chinese government subsidizing supply chains to reduce the final price.

Already this year, tariffs on imported lithium-ion batteries for electric cars will increase from 7.5 to 25 percent. Batteries for other needs will also be subject to a 25 percent duty, but from 2026. Tariffs on graphite and some critical raw materials will also increase from 0 to 25 percent. And since China controls more than 80 percent of parts of the electric vehicle battery supply chain, tariff increases will go hand in hand with investments in building its own industrial base in the United States.

As for electric cars, authorities are concerned about the risks of overproduction due to decreased demand for products from American companies due to their higher prices. This may result in decreased revenue and profits. It is proposed to protect local producers by immediately increasing the duty by 75 percentage points – from 25 to 100 percent. However, according to Reuters, the inclusion of electric vehicles in the list has more political than practical implications. The fact is that very few battery-powered cars are imported from the Middle Kingdom, and these are not only local models, but, for example, Polestar. So overall nothing will change.

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