Biden administration mulls penalties for Chinese-made EVs from Mexico

The Biden Administration is considering penalties for Chinese electric vehicle (EV) automakers who are relocating their production to Mexico. This move comes after the administration released new tariffs on Chinese EV imports on May 14, 2024, aiming to protect American workers and businesses.

The tariffs are expected to impact around $18 billion worth of products from China, including steel, aluminum, computer chips, and solar cells. President Biden stated, “We’re not going to let China flood our market, making it impossible for American auto manufacturers to compete fairly.

I will do it by following international trade laws.”

The White House is evaluating the possibility of adding penalties to the tariffs if Chinese EV makers move their production to Mexico in an attempt to bypass the new import taxes. U.S. Trade Representative Katherine Tai mentioned that the White House would need to pursue a different approach to impose penalties on Chinese EVs manufactured in Mexico, implying that China might utilize Mexico to evade the tariffs imposed by the United States.

One of China’s major automakers, BYD, has already begun exploring opportunities in Mexico and was considering a location in Nuevo León, where Tesla also plans to establish Giga Mexico.

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