UAW Calls For Higher Tariffs On Imported Parts And Vehicles

While the EV transition in the U.S. has slowed somewhat in recent months, China has long been committed to electrification, and currently has arguably the most competitive market for those types of vehicles on the planet. Ford is well aware of this fact, with CEO Jim Farley previously stating that Chinese EVs are the company’s main rivals and noting that he expects those vehicles to eventually make it to U.S. soil, while chairman Bill Ford added that he doesn’t believe The Blue Oval is currently positioned to compete with Chinese EVs, too. Thus, as Ford Authority reported back in December, President Joe Biden is reportedly considering raising tariffs on imported vehicles as a way to help American companies better compete against cheaper Chinese-built EVs, and now, the Untied Auto Workers (UAW) is calling for his administration to do precisely that, according to Automotive News.

Currently, the U.S. imposes a 2.5 percent tariff on imported passenger vehicles and parts from countries with “most-favored status” – or those that are considered to be favorable trade partners with the U.S. However, others – including China – are subjected to a higher, 25 percent tariff on light-duty trucks. The UAW is now arguing that these numbers should be higher, however, as it claims that current tariffs aren’t enough to prompt companies to comply with the the North American trade agreement, nor to keep China from entering the same market via Mexico.

“If we want greater adherence to the USMCA’s ‘rules of origin’ provisions, the consequences for noncompliance [have] to be greater than 2.5 per cent,” Jason Wade, top administrative assistant to UAW President Shawn Fain, told officials with the Office of the U.S. Trade Representative and the Interagency Committee on Trade in Automotive Goods. “We have to make it so the consequences of not following the rules of origin underneath the USMCA is not considered a minor infraction. Chinese companies will take the infrastructure and ecosystem that’s been developed over the last 25 years and just pay the fee and have access to the U.S. market.”

However, Matt Blunt, president of the American Automotive Policy Council – which represents Ford – argues that the current rules are working as intended. “Prior to the USMCA and the [Inflation Reduction Act], the trend in North American trade was a steadily growing level of imports from Mexico and a growing trade deficit with our North American trade partners,” Blunt said at the hearing. “However, since the USMCA was implemented, the U.S. automotive trade deficit has been relatively flat, and this represents an important, new and positive trend.”

We’ll have more on the state of automotive tariffs soon, so be sure and subscribe to Ford Authority for continuous Ford news coverage.