This is a classic case of trade protectionism.

According to a report in the Global Times, citing multiple U.S. media sources, the Biden administration is expected to announce additional tariffs on China as early as next week, targeting key sectors such as electric vehicles, batteries, and photovoltaics, with tariffs on Chinese electric vehicles potentially rising to 100%.

Media sources, citing insiders, suggest that the full announcement of the new tariffs on China could be released as soon as the 14th. It is currently unclear about the specific amounts or categories of the tariffs, but it is said that the Biden administration has focused its scope within the realms of strategic competition and national security. This decision comes after the Biden administration's review of the previous administration's Section 301 tariffs on China.

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Earlier, insiders indicated that the Biden administration is preparing to announce a tariff measure targeting key strategic industries in China as early as next week, imposing new, targeted tariffs on industries including electric vehicles, batteries, and solar energy equipment.

Two insiders stated that the U.S. government is expected to release an announcement on Tuesday (15th). In addition to imposing new tariffs on some key industries, the announcement will also largely maintain the existing tariffs on China. Specific details are still unclear, and the White House has declined to comment.

The Associated Press, citing reports, stated that the Biden administration has focused on industries that are "strategically competitive and of national security concern." Under Biden's new plan, tariffs on Chinese electric vehicles will increase to four times the current rate, rising from 25% to 100%. Previously, several bipartisan members of Congress pressured the White House to directly ban the import of Chinese electric vehicles.

The reality is that the U.S. government's additional tariffs on China have long been a source of discontent among the American business community. In March of last year, the U.S. International Trade Commission also acknowledged that after an investigation, it was found that while the Trump administration claimed to "make China pay a price," it was actually American importers and consumers who paid the price, with the import prices of American companies and U.S. consumer prices subsequently rising. This means that American companies have borne almost all the costs of the U.S. additional tariffs on China.

However, as Chinese electric vehicles, photovoltaics, and other products have become popular worldwide, in pursuit of political gains, the Biden administration has started to consider raising tariffs, with frequent actions since the end of last year.

In February of this year, Biden issued a statement announcing that he would take "unprecedented action" to prevent the entry of Chinese connected vehicles and trucks, including electric vehicles, into the U.S. market. An automotive industry official later revealed that the Biden administration is considering increasing tariffs on Chinese electric vehicles. In April, the Biden administration announced that it would impose triple tariffs on Chinese steel and aluminum. At the same time, U.S. officials have continuously hyped the so-called issue of "overcapacity" in China.Foreign Ministry Response

According to reports, informed sources have revealed that the Biden administration is preparing to announce a new set of targeted tariffs against China as early as next week, which will impose additional duties on industries including electric vehicles, batteries, and solar equipment.

In response, Chinese Foreign Ministry spokesperson Lin Jian stated during a regular press conference that the previous U.S. administration's imposition of Section 301 tariffs on China severely disrupted normal trade and economic exchanges between China and the U.S., and have been ruled by the World Trade Organization (WTO) to violate WTO rules. Instead of correcting its erroneous actions, the U.S. continues to politicize trade issues and misuse the so-called Section 301 tariff review process, intending to further increase tariffs, which is a mistake on top of a mistake.

Lin Jian expressed that we urge the U.S. side to earnestly abide by WTO rules, cancel all additional tariffs imposed on China, and must not increase tariffs. China will take all necessary measures to defend its rights and interests.

Response from China Association of Automobile Manufacturers (CAAM)

Today, Fu Bingfeng, the Executive Vice President of the China Association of Automobile Manufacturers, stated, "The U.S. exaggeration of overcapacity in China's new energy vehicle industry and so-called national security concerns is a typical form of trade protectionism. The new energy industry is a common creation of humanity and can bring common welfare to mankind; it is very unreasonable to face restrictions when entering the U.S. market."

Furthermore, the European Union is also initiating an anti-subsidy investigation into Chinese electric vehicles and considering the imposition of punitive tariffs.

For no other reason, it is also because European car manufacturers believe they have been harmed. According to EU law, July 4th, nine months after the EU launches an investigation, will be the deadline for the EU to introduce temporary measures, including tariffs or quotas.

What does the future market look like?

At present, the domestic new energy vehicle market is still continuously "in-rolling," with car manufacturers aiming at overseas markets.Looking at the data, although the sales of passenger cars declined in April, there were still bright spots. Among them, the production of passenger cars nationwide reached a historical high. In April, the production of passenger cars nationwide was 1.988 million vehicles, which is 18,000 units higher than the historical peak of the same period in 2018, setting a new record.

New energy vehicles continued to grow. Data shows that in April, the retail sales of new energy passenger cars were 674,000 units, a year-on-year increase of 28.3%. The domestic retail penetration rate of new energy vehicles in April was 43.7%, an increase of 11.7 percentage points from the 32% penetration rate of the same period last year.

Export growth exceeded domestic sales growth. In April, the export volume of automobiles was 504,000 units, a month-on-month increase of 0.4% and a year-on-year increase of 34%. From January to April, the export volume of automobiles was 1.827 million units, a year-on-year increase of 33.4%.

Additionally, data indicates that in the first quarter, China's share of the global plug-in hybrid vehicle market rose to nearly 70%.

Some institutions have stated that they expect China's automobile exports to the European Union to grow by more than 20% by 2024; the ASEAN market outlook is positive, benefiting from the zero-tariff policies of Thailand, Indonesia, and Malaysia, with export growth expected to maintain a rate of 10-20% until 2025; the export growth to Australia and South America in 2024 may reach 20-30%; and the overall export growth rate of Chinese automobiles is expected to be 20% in 2024.

From a policy perspective, recently, seven departments including the Ministry of Commerce and the Ministry of Finance jointly issued the "Implementation Details of the Automobile Scrappage and Replacement Subsidy," clarifying the financial subsidy policy for the scrappage and replacement of automobiles.

Cui Dongshu pointed out that with the implementation of the scrappage and replacement policy, it will have a significant positive impact on the car market, and it is expected that retail sales in the car market in May will be better than in April.

Under the stimulus of the new policy, it is expected that the annual total of scrapped vehicles will reach a scale of nearly ten million units. The subsidy for the scrappage and replacement of automobiles will bring an increase of millions of units to private new car consumption in the car market and will also bring an annual consumption increase of more than one hundred billion yuan.