As President Joe Biden announces new United States tariffs on several Chinese products, including Electric Vehicles (EVs), China-based corporations may evade those tariffs by rerouting production through other countries.
This week, Biden announced new tariffs on Chinese steel and aluminum, semiconductors, EVs, batteries, critical minerals, solar cells, ship-to-shore cranes, and medical products.
Specifically with EVs, Biden will slap over 100 percent tariffs on China-made EVs as former President Donald Trump’s tariffs on China-made EVs are the only trade policy currently blocking an onslaught of Chinese cars from flooding the U.S. market and severely crippling the nation’s auto workers.
Some Chinese companies have already hinted at evading such tariffs.
The Chinese Communist Party’s (CCP) premier automaker, BYD, is planning a factory in Mexico to produce its cheap EVs. At current U.S. tariff rates with Mexico, those cars could be sold in the U.S. market facing hardly any tariffs.
Executives with BYD, which launched a new pickup truck in Mexico this week, have repeatedly claimed they are not interested in entering the U.S. market.
U.S. Trade Representative Katherine Tai, though, has hinted that the administration is considering tariffs on products arriving from Mexico. Such tariffs would come as Mexico has become the largest source of imports to the U.S., toppling China for the spot.
In the first three months of this year, more than $115 billion worth of products have arrived in the U.S. market from Mexico. Meanwhile, fewer than $100 billion worth of products from China have arrived during the same period.
“Decades of unfair trade by the People’s Republic of China have devastated American communities and weakened our economic security,” Alliance for American Manufacturing President Scott Paul said in a statement following the announcement of the new China tariffs.
Paul suggested the tariffs ought to be seen as a starting point in terms of protecting American workers and the nation’s manufacturing base from China, saying, “We look forward to working with the Biden administration and Congress to build on these achievements.”
Likewise, Michael Stumo with the Coalition for Prosperous America (CPA) wrote on X, formerly Twitter, that the new China tariffs are an indication that “broad universal tariffs [are] needed for overall trade balance impact.”
Chinese automakers rerouting production to Mexico or Vietnam to avoid the tariffs would not be unprecedented.
In August of last year, Biden’s Commerce Department again found that Chinese solar companies are rerouting their production lines through Cambodia, Malaysia, Thailand, and Vietnam in a clear effort to evade U.S. tariffs on Chinese solar panels.
“Specifically, Commerce found that five companies were attempting to avoid the payment of U.S. duties by completing minor processing in third countries and that three companies were not circumventing,” agency officials wrote of the trade violation.
With immense pressure from his own administration, Republicans, and Democrats, Biden sided with the Chinese solar companies and imposed a tariff waiver despite the findings. Those tariff waivers will expire in June and will not be extended, administration officials have said.
The latest round of tariffs will hit those Chinese companies that had received tariff waivers in the past but that continue to route their production through Southeast Asia.
John Binder is a reporter for Breitbart News. Email him at
