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The federal government is considering higher tariffs for Chinese EV imports in a bid to protect local manufacturing incentivized by IRA stipulations, the Wall Street Journal has reported, citing unnamed sources.
Chinese electric vehicles are already subject to a 25% tariff as an effort to prevent them from outselling local vehicles but this, according to the report, may not be enough. Solar panels are another target for higher tariffs, the report said.
The solar panel tariffs are a contentious issue for the U.S. solar industry. Local panel producers are very strong supporters but solar farm developers are not huge fans since Chinese panels—and panels produced elsewhere in Asia—are much cheaper than the local ones.
“The United States currently lacks the capacity to produce solar panels and cells in adequate volumes to meet domestic demand. The two-year duty moratorium allows planned solar installations to move forward while we scale domestic manufacturing in the near-term,” the president and chief executive of the Solar Energy Industries Association said earlier this year as companies warned projects would need to be put on hold or canceled because of the federal government’s tariff policies.
Chinese EVs, meanwhile, are seen as a threat both in the European Union and the U.S., with carmakers worrying they are competitive with their own cars in terms of performance but are cheaper, even though EVs are heavily subsidized not just in China but in the EU and the U.S. as well.
“China is determined to dominate the electric-vehicle market by using unfair trade practices, but I will not let them. I promise you,” President Biden said last month, speaking to striking workers from the auto industry.
The federal government offers subsidies of up to $9,000 for an EV over 10 years, with added subsidies from utilities and federal support for EV makers pushing the total above $10,000.
By Irina Slav for Oilprice.com
Irina is a writer for Oilprice.com with over a decade of experience writing on the oil and gas industry.