Republican U.S. Senator Marco Rubio unveiled a proposal on Tuesday to significantly increase tariffs on Chinese vehicle imports by $20,000, aiming to curb what he called China’s efforts to “flood U.S. auto markets” and protect American automakers and workers.
Rubio, who serves as the top Republican on the Senate Intelligence Committee, also announced plans to introduce legislation that would expand tariffs to include vehicles produced by Chinese automakers in other countries, such as Mexico. Additionally, the proposed legislation would restrict subsidies for electric vehicles to those that comply with stringent North American free trade rules.
See also: China Sets Sights on 70% NEV Sales by 2030, Global Market Shifts Towards Electrification
According to Rubio, the proposed flat tariff increase would counter the disproportionate advantage enjoyed by lower-end Chinese autos and close existing loopholes that reduce the amount paid. He emphasized the need to “safeguard American automakers and workers against the influx of artificially cheap vehicles from China.”
With national elections approaching in November, both Democratic President Joe Biden and leaders from both parties in Congress are supporting measures to limit Chinese electric vehicle imports.
See also: Biden Orders Probe into National Security Risks Posed by Chinese Vehicle Imports
Rubio stressed the urgency of the situation, stating, “America’s existing tariffs, once effective, are now insufficient to counter China’s newest strategies,” and called for a comprehensive effort to prevent the Chinese Communist Party from gaining a foothold in the American auto market.
The proposal comes amid reports that China’s BYD plans to establish an EV factory in Mexico. BYD, known for its affordable models and diverse lineup, recently surpassed Tesla to become the world’s leading EV maker by sales.
See also: BYD Rules Out Launching Passenger EVs in the US, Citing Market Complexity and Political Factors
Last week, the White House announced an investigation into whether Chinese vehicle imports pose national security risks and could lead to restrictions due to concerns about “connected” car technology. President Biden emphasized the need to prevent China from flooding the U.S. market with its vehicles, stating, “I’m not going to let that happen on my watch.”
Senator Gary Peters, a Michigan Democrat, commended the investigation, stating that there is no place in the U.S. for vehicles made by Chinese Communist Party-backed companies.
See also: BYD to Decide on Mexican Factory Location in Second Half of 2024
While there are relatively few Chinese-made light-duty vehicles being imported into the U.S., a recent warning from a U.S. manufacturing advocacy group highlighted the potential threat posed by low-cost Chinese autos and parts from Mexico to the U.S. auto sector.
Last week, Republican Senator Josh Hawley introduced legislation to raise the base tariff rate on Chinese imports to 125% from the current 27.5%. The measure also seeks to apply a 100% tariff hike to vehicles assembled in Mexico by Chinese-based automakers.
