Sen. Hawley Introduces Legislation to Boost Tariffs on Chinese Vehicles

Sen. Josh Hawley (R-Mo.) questions witnesses as they testify before the Judiciary Subcommittee on Competition Policy, Antitrust, and Consumer Rights, in Washington on Sept. 21, 2021. (Ken Cedeno/Pool/Getty Images)

Sen. Josh Hawley (R-Mo.) has proposed new legislation that would raise tariffs on vehicle imports from China.

The bill—the Protecting American Automakers from China Act—would raise the base tariff rate for auto imports from China to 100 percent from the current 2.5 percent. The increase would mean a total tariff of 125 percent on all imported Chinese vehicles, up from 27.5 percent currently.

Additionally, the new tariffs would be applied to vehicles manufactured by companies of Chinese origin, regardless of where they are built. In other words, Chinese automakers would not be able to use other nations, such as Mexico, as a “backdoor to avoid these new tariffs,” according to Mr. Hawley.

“If Joe Biden wants to support American autoworkers, he should start by protecting them from the existential threat posed by China,” Mr. Hawley said in a Feb. 28 statement accompanied by the introduction of his bill.

“We must put American workers first, bring jobs back to American soil, and reject radical climate mandates that make China rich and America poor.”

In 2023, China overtook Japan as the world’s biggest auto exporter, according to official data released in January from the two countries. In the final quarter of last year, Chinese electric carmaker BYD sold more electric vehicles (EV) than Tesla. On Feb. 28, BYD Americas CEO Stella Li said that the carmaker is looking for a location to set up a factory in Mexico, confirming previous media reports.

National Security Concerns

China expert Anders Corr, in a recent op-ed, said BYD’s plan for a plant in Mexico “threatens U.S. national security.”

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“The move to Mexico by BYD is an end-run around U.S. tariffs on China. The tariffs that BYD pays on cars shipped from China, 27.5 percent, would drop to just 2.5 percent for its vehicles manufactured in Mexico,” Mr. Corr, a contributor to The Epoch Times and principal at the New York-based political consultancy firm Corr Analytics, wrote.

“A slightly cheaper EV is obviously not worth gambling on the United States’ future. U.S. politicians must do more to prevent the BYD deluge.”

Earlier this month, the Alliance for American Manufacturing, a U.S. manufacturing advocacy group, warned in a report that low-cost Chinese automobiles and parts pose a threat to the U.S. auto industry.

“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, whose centrality in the national economy is unimpeachable,” the group said.

One of the group’s recommendations to Washington is to impose “exclusionary tariffs on all Chinese automobile imports to the United States,” targeting both EVs and internal combustion engine vehicles.

Another recommendation says that Washington should “exclude automobiles and component parts manufactured by companies headquartered in a non-market economy, such as China, from gaining any preferential treatment under USMCA [United States-Mexico-Canada Agreement], GSP [Generalized System of Preferences], and any other grade agreement.”

In November last year, four lawmakers from the House Select Committee on the Chinese Communist Party—including its chairman, Rep. Mike Gallagher (R-Wis.), and ranking Democrat member, Rep. Raja Krishnamoorthi (D-Ill.)—sent a letter to U.S. Trade Representative Katherine Tai, expressing concerns about China’s potential plan to “flood the United States and global markets with automobiles, particularly electric vehicles.”

The lawmakers wrote that China’s auto industry has been “propped up by massive subsidies and long-standing localization and other discriminatory policies.” As a result, they asked Ms. Tai to consider whether there is a need to conduct a new Section 301 investigation into China’s practices.

Additionally, the lawmakers asked Ms. Tai “whether the current rules of origin in our trade agreements need to be strengthened and what other policy tools are needed to prevent the PRC [People’s Republic of China] from gaining a backdoor to the U.S. market through our key trading partners.”

In January, Ms. Tai said the Biden administration was reviewing “China’s non-market policies and practices in its automotive industry” and the current U.S. tariff levels.

Reuters contributed to this report.