Concern China Could Evade EV Tariff

The Administration is very concerned that China may try to evade the new 100 percent tariffs on Chinese electric vehicles, Commerce Secretary Gina Raimondo told lawmakers Wednesday.

The US Trade Representative’s Office, with assistance from the Commerce Department, is looking at how to ensure Chinese EVs made in Mexico are still subject to the tariff, she told members of the Senate Appropriations commerce, justice, science and related agencies subcommittee.

The US-Mexico-Canada Agreement allows automobiles from Mexico to enter the US market duty-free as long as certain domestic content requirements are met.

“We are very concerned about this risk,” Ms. Raimondo said. “The purpose of the USMCA was not to help China.”

The final decision on how to keep China from evading the tariffs will be made by USTR, she told the panel, but “we're going to do whatever we need to do to make sure China doesn't end run around these tariffs.”

Ms. Raimondo also said that Commerce expects to have a rule out this fall on Chinese connected vehicles, which pose a real national security risk.

Asked if she sees any path forward for an agreement with China to make trade fairer, she responded that President Biden has asked her and other Administration officials to promote bilateral relations as much as possible and to work with Beijing where cooperation is possible. But the Administration will never negotiate with China on US national security measures, even though Chinese officials have asked.