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Ford Authority

Higher Tariffs May Not Stop Chinese EVs: Report

Amid concerns over national security and potentially unfair competitive practices, the Biden Administration opted to essentially triple existing U.S. tariffs on imported Chinese EVs recently, a move that has been praised by more than one industry lobby group, even though no Chinese EVs are currently on sale in that country. Meanwhile, the European Union (EU) is also working to raise tariffs on those same types of vehicles, though at least one expert believes that these measures may ultimately prove to be ineffective.

BYD Seagull - Exterior 002 - Side

“I call it the great Godzilla. The world has never seen an auto industry of this size and scale,” Michael Dunne – who is the CEO of Duane Insights, which tracks the Asian auto market – told CNBC in a recent interview. Dunne pointed out that the Chinese auto market – which barely existed as recently as the early 1980s – now has the capacity to produce 40 million vehicles each year, which is enough to supply half of the globe.

Since China’s auto sales totaled just 25 million units in 2023, automakers based in that country are now working to export them to 100 other markets. Those don’t include the U.S. as of now, but Dunne believes that it’s only a matter of time before cheap Chinese EVs arrive there, even with these higher tariffs in place. He’s joined by a few other auto industry executives who believe that these higher tariffs either won’t hold off those companies from invading the U.S. for long, while some believe they may even do more harm than good in the long term.

BYD Seagull - Exterior 003 - Rear

This is precisely why some lawmakers have called for the Biden Administration to ban Chinese EVs from American soil altogether, but in the meantime, domestic companies like Ford are working to make cheaper models that can effectively compete if they do in fact wind up being sold in the U.S. In fact, a previous trip to China is precisely what inspired Ford CEO Jim Farley to shift gears and begin developing a $25k all-electric crossover slated to launch in late 2026, as Ford Authority previously reported.

We’ll have more on the impacts of these new tariffs soon, so be sure and subscribe to Ford Authority for comprehensive Ford news coverage.

Brett's lost track of all the Fords he's owned over the years and how much he's spent modifying them, but his current money pits include an S550 Mustang and 13th gen F-150.

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Comments

  1. Motorpsychology

    The 25% tax on imported trucks has kept light trucks out of this market for decades, and encouraged foreign automakers to build them here. We could make a requirement of no imported vehicles period, only joint venture manufacturing here with an existing OEM.
    If Chinese vehicles imported into the US are to have a tax on them, that tax should be paid by the retail customer and itemized separately on the window sticker, like how destination & delivery is. That way it doesn’t get buried in the Mfr’s internal cost of the vehicle, and the buyer is clearly aware of it and can make a better informed choice. I believe most buyers are clueless or ambivalent about imports from China, but a separately itemized 25-50% tariff on the window sticker of a $60,000 Lincoln Nautilus would get attention. And Louisville Assembly is under capacity. Ridiculous.

    Reply
  2. Stopcorporatehandouts

    Tariffs are only going to make legacy makers vehicles more expensive with most sourcing batteries from China. USA auto makers need to stop trying to copy Tesla model with only doing “luxury” EVs. China EVs are already in the US market as sold by Volvo and Polestar. Need to stop holding the big 3s hand with their poor decisions and non-competitive models.

    Reply
    1. Nautical-one345

      Exactly! I agree with you.

      Reply
  3. Ford Owner

    The Chines carmakets will do what the Japanese and European makers have done: assemble the cars in the U.S. I know of one electric carmaker (whose name begins with “E”), who will do this in about five years, or before 2029. Their cars cost $10,000 without tariffs.

    Reply
    1. Mf

      I disagree, they’ll probably build them in Mexico for pennies on the dollar like the domestics do, then abuse NAFTA to bring them into the US.

      That said, at least this way they’ll have to comply with some safety, environmental, and human rights restrictions. Take away the slave laborand the Chinese cost advantage drops quickly.

      Reply
  4. Blackbelt

    When Obama threw a big tariff on Chinese tires, the first thing the domestic tire people did was raise their prices. Tariffs suck.

    Reply

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