The US government locked in sharp hikes in tariffs on Chinese imports on Friday, including a 100 percent tariff on EVs, according to Reuters.

The US government on Friday locked in significant tariff hikes on Chinese imports, including a 100 percent tariff on electric vehicles (EVs), according to a Reuters report today.

Many of the tariffs will go into effect on September 27, including a 100 percent tariff on Chinese EVs, a 50 percent tariff on solar cells, and 25 percent tariffs on steel, aluminum, EV batteries and key minerals, the United States Trade Representative (USTR) office told Reuters.

The decision was made to ensure that the US EV industry diversifies away from China's dominant supply chain, the report said, citing White House top economic adviser Lael Brainard.

She said the “tough, targeted” tariffs are needed to offset China's policies of state subsidies and technology transfer policies, which have led to overinvestment and overcapacity.

However, Washington is investing hundreds of billions of dollars worth of its own tax subsidies to develop domestic EV, solar and semiconductor sectors, the Reuters report noted.

“The 100 percent tariff on electric vehicles here does reflect the very significant unfair cost advantage that Chinese electric vehicles in particular are using to dominate car markets at a breathtaking pace in other parts of the world,” Brainard said.

The USTR announced on May 14 that in 2024, the tax rate on Chinese EVs would quadruple from 25 percent to 100 percent.

US Trade Representative Katherine Tai said at the time that it was intended to counter China's "unfair" policies and practices.

A spokesman for China's Ministry of Commerce later said that day that the move was a misuse of the 301 tariff review process by the US to politicize economic and trade issues out of domestic political considerations.

The US side should correct its wrong practices and cancel the tariff increase measures against China, a statement said, adding that China will take resolute measures to defend its rights and interests.

Quadrupling the tariff rate on Chinese EVs would seem to have no substantial impact on Chinese automakers, as the previous 25 percent tariff as well as the Inflation Reduction Act (IRA) have substantially blocked them out.

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