Tariffs and Subsidies

The Biden administration is taking a two-pronged approach to promote U.S. electric vehicle (EV) production. On one hand, they are imposing tariffs on Chinese EVs and components, aiming to curb the influx of Chinese-made vehicles into the American market. On the other hand, they are offering substantial subsidies to incentivize companies to manufacture EVs within the United States.

The 100% tariff on Chinese EVs builds upon tariffs already implemented by the Trump administration. Additionally, tariffs have been increased on components like batteries and steel, further discouraging the import of these parts from China. The goal of these measures is to protect the American EV industry from being overwhelmed by cheaper Chinese imports.

Simultaneously, the Biden administration is offering generous subsidies to encourage companies to build EVs in the United States. These subsidies aim to make American-made EVs more competitive with their Chinese counterparts, both in terms of price and availability.

While these measures are intended to boost the American EV industry, it remains to be seen how effective they will be. The Rust Belt states, which are heavily reliant on the automotive industry, are eagerly awaiting the promised benefits of these policies. However, it is still too early to tell whether these efforts will translate into a significant increase in EV production and employment in these regions.