US tariff hikes on China EVs, batteries take effect 1 August

SINGAPORE (ICIS)–Starting August, US tariffs on imports of electric vehicles (EVs) from China will quadruple to 100%, while those for battery materials will more than triple to 25%, the US Trade Representative (USTR) said.

Tariff hikes on imports of other Chinese products will take effect in January 2025 and January 2026, according to the USTR notice dated 22 May.

Schedule of US tariff hikes on Chinese imports (by product)

Product Category	Proposed Changes
Battery parts (non-lithium-ion batteries)	Up from 7.5% to 25% on 1 Aug 2024
Electric vehicles	Up from 25% to 100% on 1 Aug 2024
Lithium-ion electrical vehicle batteries	Up from 7.5% to 25% on 1 Aug 2024
Lithium-ion non-electrical vehicle batteries	Up from 7.5% to 25% on 1 Jan 2026
Natural graphite	Up from 0% to 25% on 1 Jan 2026
Other critical minerals	Up from 0% to 25% on 1 Aug 2024
Permanent magnets	Up from 0% to 25% on 1 Jan 2026
Semiconductors	Up from 25% to 50% on 1 Jan 2025
Ship-to-shore cranes	Up from 0% to 25% on 1 Aug 2024
Solar cells (whether or not assembled into modules)	Up from 25% to 50% on 1 Aug 2024
Steel and aluminum products	Up from 0–7.5% to 25% on 1 Aug 2024
Facemasks	Up from 0–7.5% to 25% on 1 Aug 2024
Medical gloves	Up from 7.5% to 25% on 1 Jan 2026
Syringes and needles	Up from 0% to 50% on 1 Aug 2024

Source: USTR

EVs and associated battery markets are an important growth opportunity for the chemical industry, with chemical producers separately developing battery materials, as well as specialty polymers and adhesives for the environment-friendly vehicles.

The automotive industry has a vital relationship with the chemicals sector and continues to be an instrumental force in the global economy as an employment-intensive sector.

In 2021-2023, the US’ share to Chinese EV exports stood at just 0.7-1.6% amid its existing 25% punitive tariffs on these green cars.

The US tariff hike to 100% is largely considered a de facto ban on Chinese EVs, an official from the China Association of Automotive Manufacturers (CAAM) had said.

There are concerns that another round of tit-for-tat disruptive protectionist policies between the world’s two biggest economies is in the offing.

China has been facing criticisms from its major trading partners for operating at overcapacity. In late 2023, the European Commission had initiated an anti-subsidy investigation into China’s EVs.

In a post to the social media platform X on 22 May, China’s Chamber of Commerce to the European Union (CCCEU), signaled that it “could raise its temporary tariff rate on imported large-engine vehicles to a maximum of 25%” from 15% currently.

On 14 May, the US announced the tariff hikes on $18bn worth of imports from China, citing what it deems as unfair trade practices by the Asian giant, with a view of protecting US jobs.

US companies affected by the new trade measures can apply for tariff exclusions for certain machinery, but such exceptions will end on 31 May 2025, the USTR stated, while also proposing temporary exclusions for some solar manufacturing equipment.

The decision was made months ahead of US elections in November, in which incumbent US President Joe Biden is seeking a second four-year term.

Focus article by Fanny Zhang

Thumbnail image: Rows of new energy vehicles at the Changan Automobile Distribution Center in Chongqing, China, on 19 May 2024.(Costfoto/NurPhoto/Shutterstock)