Republican, Dem Senators Seek Higher Barriers for Chinese Automakers' Vehicles
Democrats that represent Michigan and Ohio, where Big 3 automakers' plants are concentrated, are asking that the Section 301 review hike tariffs on Chinese automakers. Section 301 tariffs already apply a 25% tariff, making the total duty for a Chinese auto 27.5%.
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Their March 7 letter is the third push from the Senate in the last eight days to hike tariffs on cars made by Chinese-owned firms, whether in China or in other countries. First came the action of Sen Josh Hawley, R-Mo., who introduced a bill to hike baseline tariffs by 100% on passenger vehicles and some other vehicles (see 2402280061).
Next came Sen. Marco Rubio, R-Fla., who introduced three bills this week on Chinese autos:
- A $20,000 tariff on all Chinese vehicles, which he said could address valuation games, and "address the disproportionate advantage of lower-end Chinese autos
- Language to allow CBP to apply tariffs to cars made outside China if the company was at least 25% owned by Chinese parties, or if there was a contract between the manufacturer and a Chinese entity if there is financial return for the entity
- Changes to the Inflation Reduction Act electric vehicle tax credits, so that there would no longer be a leasing loophole, and so that cars and trucks must meet USMCA auto rules of origin, not just undergo final assembly in North America.
On March 7, Sens. Gary Peters and Debbie Stabenow, both D-Mich., and Sen. Sherrod Brown, D-Ohio, in addition to asking for higher tariffs on Chinese autos, thanked the administration for initiating a rulemaking by the Bureau of Industry and Security to address connected vehicles made by, or with components from, Chinese-owned firms, no matter where the vehicles were assembled.
"Allowing heavily subsidized Chinese vehicles to enter the U.S. marketplace would endanger American automotive manufacturing. Artificially low-priced Chinese EVs flooding the U.S. would cost thousands of American jobs and endanger the survival of the U.S. automotive industry as a whole," they wrote in support of higher tariffs.
On the rulemaking, they wrote, "this investigation is essential to protect American consumers and critical infrastructure from exploitation or sabotage from Chinese state actors, while also supporting U.S.-led innovation in vehicle technology. To achieve this goal, we urge your immediate focus on CCP-backed companies that may seek to circumvent tariffs to export highly connected vehicles while you work alongside the domestic automotive supply chain to identify high-risk connected and autonomous technologies controlled by our adversaries that could directly harm consumers or pose a risk to our cybersecurity or critical infrastructure."
Rubio said in a press release on his bills: "America’s existing tariffs, once effective, are now insufficient to counter China’s newest strategies. But raising tariffs alone is not enough. We need a multi-pronged effort to prevent the Chinese Communist Party from entering the American auto market before it is too late."