糖心视频

 Marsha Chartrand

Steep tariffs may block Chinese threats to Michigan’s growing EV industry

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Chinese electric vehicle company BYD displays its models in Shanghai in January. The brand sells most of its vehicles in China, where the style and lower price point appeal to customers. However, it said early this year that it plans to open a factory in Mexico to sell lower-cost vehicles there. Photo credit: Robert Way / Shutterstock.com.

by Paula Gardner (Bridge Michigan)

Michigan听growing electric vehicle industry听is likely to benefit from steep new tariffs on Chinese exports to the United States that experts say will stave off unfair competition.

The tariffs 鈥斕齛nnounced Tuesday听by President Joe Biden at the White House 鈥 are expected to offset lower prices made possible by Chinese government subsidies on $18 billion worth of products sold in the U.S. each year, ranging from EVs and semiconductors to steel and medical devices.

The move 鈥渨ill help protect key U.S. industries, like the clean energy and semiconductor sectors,鈥 said U.S. Secretary of Commerce Gina Raimondo in a statement on Tuesday.

China is undermining U.S. supply chains 鈥渂y flooding the market with artificially cheap products that hurt American businesses and workers,鈥 Raimondo added.

Central to the ruling, however, are electric vehicles. While Chinese automakers are growing their global market share of EVs, U.S. manufacturers are investing billions to shift to the new technology even as the pace of consumer sales slows.

So far, only Polestar is importing EVs from China, and it plans to open a U.S. factory this year. Another Geely brand,听Lotus, recently听started taking orders听for its luxury electric SUV made in China, Edmunds reports.

But auto industry experts agree that China eventually will turn to the U.S. for EV sales, notably as Chinese manufacturers deal with overproduction. Yet those vehicles, due to government subsidies, are selling for as little as $10,000.

The switch from gas-fueled autos alreadyleaves U.S.-based automakers 鈥 including Michigan Ford Motor Co. and General Motors, which lose money on each EV sale 鈥 vulnerable to lower prices set by Chinese automakers.

Tariffs on EVs will increase this year from 25% to 100%, with hikes to 25% planned for lithium-ion EV batteries, battery materials and critical minerals.

鈥淲e鈥檝e got to make sure we’re competing on a level playing field,鈥 U.S. Rep. Debbie Dingell, D-Ann Arbor, told Bridge Michigan on Tuesday after leaving a White House presentation by Biden. 鈥淎nd we鈥榲e got to keep our state strong.鈥

The price-leveling policy change comes as听Michigan is spending billions听to attract clean-energy business. Beyond over $2 billion committed to major EV battery factories, hundreds of millions more in grants, infrastructure and worker training has been promised to companies like Lucid Motors, Calumet Electronics,听Corning听and听SK Siltron听to increase clean-energy related production.

Still, Chinese EVs account for 60% of global market share. China also controls as much as 80% of the EV battery supply chain, the White House estimated.

鈥淭he Communist government is subsidizing those vehicles,鈥 Dingell said. 鈥淭hey don’t pay their workers. They don’t have environmental standards. They don’t have labor standards. They don’t have occupational safety standards.

鈥淲e cannot let China shut us out of the market.鈥

Tariffs against Chinese products听from autos to baseball hats were initiated in 2018 by then-President Donald Trump under a rule allowing the move when U.S. trade is restricted. The tariffs were听set to expire this month, after several renewals while they were reviewed.

During the pandemic 鈥 notably amid shortages of electronic chips, medical supplies and consumer products 鈥 the Biden administration initiated vast programs to increase U.S. manufacturing of those products, while also increasing EV production to meet climate goals.

The initiatives include: The听Inflation Reduction Act $369 billion听for听climate-focused changes, including promoting EVs; $53 billion in the听CHIPS and Science Act听to boost semiconductor manufacturing; and the听Bipartisan Infrastructure Law,听which also funds an EV boost.

Chinese-induced pricing pressures are facing heightened political scrutiny as Biden is expected to face Trump in the 2024 presidential election.

Trump has called for steeper tariffs, and on Tuesday said that听more products听should be under tariff protection and that Biden administration 鈥渟hould have done it a long time ago.鈥

While both presidential candidates now support tariffs on Chinese EVs and other goods,听some criticize them听as expensive for American businesses and consumers.

Beyond free trade, national security also is a concern when it comes to U.S.-China relations.

With the tariffs, Biden 鈥渨isely followed President Trump call to levy tariffs,鈥 said Joseph Cella, a former U.S. diplomat from Michigan who is听critical of state policies involving Chinese businesses.

Deals with Chinese companies need more scrutiny to expose any Chinese Communist Party ties, Cella said, since they have the potential of 鈥渋mperiling our national and economic security.鈥

Several members of Congress 鈥 including Dingell and Michigan Democratic Reps. Dan Kildee, Elissa Slotkin, Shri Thanedar and Haley Stevens 鈥 sent a听letter听to Raimondo, the U.S. commerce secretary, in April urging her to adopt steeper tariffs. They, too, raised national security concerns.

鈥淭he implications of the Chinese automotive industry exponential growth extend beyond economic considerations, encompassing broader national security concerns,鈥 the lawmakers wrote. 鈥淐CP-backed initiatives are aimed at achieving global market dominance.鈥

Beyond EVs

Other tariffs set by Biden action, according to the听White House:

Semiconductors:听The tariff rate on semiconductors will increase from 25% to 50% by 2025.

Solar cells:听The tariff on solar cells (either assembled into modules or not) will increase from 25% to 50% in 2024.

Steel and aluminum:The tariff rate on certain steel and aluminum products under Section 301 will increase from 0鈥7.5% to 25% in 2024.

Ship-to-shore cranes:The tariff rate on port cranes will increase from zero to 25% in 2024.

Syringes and needles: The tariff rates will increase from zero to 50% in 2024.

Personal protective equipment (PPE):Certain products, including some respirators and face masks, will see tariffs go from 0-7.5% to 25% in 2024.

Rubber medical and surgical gloves:Tariffs will increase from 7.5% to 25% in 2026.

鈥淐hina policies in the legacy semiconductor sector have led to growing market share and rapid capacity expansion that risks driving out investment by market-driven firms,鈥 the White House said.

The White House described steel as a 鈥渧ital sector for the American economy.

The industry has a longstanding place in the U.S., contracting in the 1970s and leaving behind mills across the Midwest, including towns like Detroit, Trenton and Albion in Michigan.

Thematerial, along with aluminum, now is at the center of a clean energy remake, officials said, including efforts to convert clean hydrogen into clean steel.

The tariffs also seek to boost medical device-making in the U.S. Many non-medical manufacturers shifted to making PPE during the pandemic.

Some 鈥渃ontinue to be used daily in every hospital across the country to deliver essential care,鈥 according to the White House. 鈥淎merican businesses are now struggling to compete with underpriced Chinese-made supplies dumped on the market, sometimes of such poor quality that they may raise safety concerns for health care workers and patients.鈥

糖心视频 one-fourth of Michigan $28 billion life sciences industry is making medical devices, including instruments and other equipment,听according to advocacy organization MichBio.

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