In the News Teaching Activity – Why is the USA putting tariffs on Chinese EVs? (May 2024)

Ed Conway, Economics correspondent at Sky News, takes a closer look at the US decision to put an 100% tariff on Chinese electric vehicles (EV). He argues that there is a political reason for the tariffs, which he believes forms part of the US’s industrial strategy aimed at counterbalancing the effects of Chinese state aid.

Joe Biden's new tariffs on Chinese goods serve multiple purposes that go beyond merely restricting imports. The tariffs, including a hefty 100% rate on electric vehicles, aim to bolster US competitiveness in green technology, particularly in electric cars and solar panels, where China currently dominates. They signal a tough stance on China, aligning with Biden's political agenda to showcase strength against Beijing, reminiscent of Trump's approach, suggesting the decision is as much political as economic. However, these measures also underscore a broader industrial strategy as the two economic giants of the world compete in the evolving global industrial landscape. China may well retaliate with some tit-for-tat tariffs; this raises concerns among economists of potential trade wars damaging the world’s trade and economic growth.

US takes aim at China's green economy with new tariffs - but why? | Business News | Sky News