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US considering higher tariffs on clean energy goods from China; 100 percent levy on EVs

A lineup of electric vehicles manufactured by China's BYD, the world's largest maker of EVs. Image: BYD

The US is considering a 100 percent levy on Chinese electric vehicles --- four times as much as the 25 percent tariff levied at present --- news reports quoting unidentified government officials suggest. That increase would form part of an overall increase in tariffs for about $300 billion worth of clean energy goods made in the Middle Kingdom. 

The Biden administration is expected to reveal the new levies this week, although a timeline for announcement has not been formally set. Besides EVs, the US will increase tariffs on critical minerals, solar goods and batteries imported from China.

America is concluding a year-long review of tariffs on Chinese goods made by former President Donald Trump, with the government trying to protect its domestic industry amid concerns that China was looking to ramp-up exports of clean energy goods.

US government officials have declined to come on record over the new tariffs, but China has warned that tariffs have disrupted trade between the two countries. "China will take all necessary measures to defend its rights and interests," a foreign ministry spokesman told reporters.

US officials are particularly focused on electric vehicles. The current 25 percent duty has helped keep out Chinese EV makers out of the US market, even though BYD is building a plant in Mexico.

China is a leader in EVs, and vehicles made in the Middle Kingdom are much cheaper than their Western counterparts, both because of low cost or labour and economies of scale. Western companies including America's Ford and Europe's Renault have warned about a looming 'Chinese storm' in the EV space.

All eyes will also be on the result of the US presidential election, which seems set to be a rematch of 2020, with incumbent Joe Biden taking on his predecessor Donald Trump.

Trump has said he was considering imposing tariffs of 60 percent or more on all Chinese imports, with stiff tariffs on Chinese-made vehicles, adding that the US auto industry faced a "bloodbath" if he were to lose the election later this year. 

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