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The Biden administration recently announced a significant increase in tariffs on Chinese imports, particularly raising tariffs on EVs to 100%. This move aims to ensure the stable development of the U.S. automotive industry. However, analysts believe that the potential ripple effects may not necessarily be beneficial for the United States.
Impact 1: Chinese cars relocated to Mexico for production
Firstly, Chinese electric vehicles (EVs) may seek alternative routes to enter the U.S. market, such as through Mexico. Under the United States-Mexico-Canada Agreement (USMCA), vehicles produced in Mexico could be exempt from tariffs if they meet the required percentage of North American-made components. Many Chinese automakers have already established a presence in Mexico; in fact, just hours after Biden announced the new tariffs, Chinese EV giant BYD launched a new hybrid pickup truck, the "Shark," in Mexico.
