Republican Senator Josh Hawley of Missouri introduced legislation this week that looks to cripple China by focusing on tariffs for vehicle imports from the country.
If passed, the bill would raise the tariff from its current rate of 2.5% all the way to 100%. That would raise the total tariff of every vehicle imported from China from the current mark of 27.5% to 125%, according to Reuters.
This bill would also impact any vehicle that is assembled in Mexico by automakers that are based in China.
Hawley’s bill was introduced at a time when there are growing concerns regarding the impact that vehicles from China could have on car companies in the U.S. Many industry experts have warned that there are many potential concerns regarding safety.
When Hawley announced his bill, he said that President Joe Biden needed to take whatever steps necessary to protect workers in America “from the existential threat posed by China.”
There is apparently bipartisan support for boosting tariffs on vehicles from China.
In November, a group of legislators from both sides of the political aisle urged Katherine Tai, the U.S. Trade representative, “to address the coming wave of (Chinese) vehicles that will be exported from our other trading partners, such as Mexico, as (Chinese) automakers look to strategically establish operations outside of (China).
Tai confirmed in January that the Biden administration was reviewing very closely “China’s non-market policies and practices in its automotive industry.” She added that current levels of tariffs would be increased accordingly.
At the same time, Tai said there were concerns that placing high tariffs on vehicle exports from China “have also encouraged Chinese firms to set up operations outside China.”
Car manufacturers in the U.S. have complained that there is unfair competition with vehicles from China.
Last Friday, the Alliance for American Manufacturing issued a report that said:
“The introduction of cheap Chinese autos — which are so inexpensive because they are backed with the power and funding of the Chinese government — to the American market could end up being an extinction-level event for the U.S. auto sector.”
The group urged the president to block parts and autos from Chinese firms that are low cost and come from Mexico, according to a report from Reuters.
While on the campaign trail, former President Donald Trump has consistently said that he’d impose significant new tariffs on vehicle imports from China. When he was in the White House, he hiked these tariffs by 25%.
Hamstringing China and doing everything possible to help save one of America’s biggest yet struggling industries is a big focus of Trump’s and Republicans in Congress as a whole.
It’s certainly not an issue that’s lost among Biden and Democrats, though they have consistently lagged behind their GOP counterparts in terms of aggressiveness in handling the issue.
If passed, Hawley’s new bill would certainly be a significant effort to hamstring China’s vehicle industry.
