WASHINGTON, (Reuters) – A bipartisan group of U.S. lawmakers has approached the Biden administration with a proposal to increase tariffs on vehicles manufactured in China. The group, led by Representative Mike Gallagher, a Republican who chairs a select committee on China, and the panel’s top Democrat, Raja Krishnamoorthi, along with Michigan Representatives Haley Stevens and John Moolenaar, has made this request in a letter to U.S. Trade Representative Katherine Tai.
The letter emphasizes the importance of not only maintaining but also raising the current 25% tariff on Chinese vehicles to counteract the anticipated increase in imports from China. The proposal for heightened tariffs continues policies initiated during the administration of former President Donald Trump and extended by the current administration.
Additionally, the lawmakers have suggested the possibility of a new Section 301 investigation into Chinese vehicles. This investigation would examine the impact of these imports on the American automotive industry and the workforce, and assess the necessary actions to counter China’s strategy to dominate the global automobile market.
The letter also addresses concerns over Chinese automakers exporting vehicles to the U.S. from other trading partners, such as Mexico. This strategy is seen as an attempt to leverage preferential access to the U.S. market through existing free trade agreements.
The issue has garnered attention within the U.S. automotive industry. John Bozzella, CEO of the Alliance for Automotive Innovation, highlighted in June that proposed U.S. environmental regulations might allow China to strengthen its position in America’s electric vehicle (EV) battery supply chain and automotive market.
Parallel to this, in September, the European Commission initiated an investigation into the imposition of punitive tariffs to protect EU producers against more cost-effective Chinese EV imports.
The U.S. lawmakers in their letter have advocated for a collaborative international approach, suggesting that the United States work with allies to implement a coordinated response that mitigates demand for Chinese vehicles in their markets.
Notably, the letter points out that many EVs exported from China are produced by Western brands with significant production capacity in China, including companies like Tesla. This fact, coupled with some U.S. automakers importing Chinese-made vehicles into the United States, underscores the legislators’ view that the current tariff level is inadequate.
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