The Biden Administration is considering penalties for Chinese electric vehicle (EV) automakers who are moving production to Mexico.
On May 14, 2024, the Biden Administration released new tariffs on Chinese EV imports and other sectors to protect American workers and businesses in the United States. The tariffs are estimated to affect $18 billion products from China including steel, aluminum, computer chips, and solar cells. Chinese EV import tariffs increased by over 102%, the highest among other China-made products.
“We’re not going to let China flood our market making it impossible for American auto—auto manufacturers to compete fairly. I will do it by following international trade laws,” Biden said.
The White House is thinking of adding penalties to the tariff if Chinese EV makers move production to Mexico to circumvent new import taxes. According to U.S. Trade Representative Katherine Tai, the White House would have to follow a different route to launch penalties on Chinese EVs produced in Mexico.
Tai stated that China might use Mexico to avoid the United States tariffs on its imports. China’s leading automaker, BYD, has already started exploring opportunities in Mexico. Recently, it launched the BYD Shark hybrid pickup truck in the Mexican auto market. Earlier this year, news broke that BYD is thinking of expanding its global presence by building an electric vehicle plant in Mexico. It was considering a site in Nuevo León, where Tesla plans to build Giga Mexico.
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