The United States wants to raise tariffs on electric vehicles and other countries. How does the Ministry of Foreign Affairs respond to car companies？

　　At the regular press conference of the Ministry of Foreign Affairs on the 10th, a reporter asked that Biden’s government is preparing to announce new tariffs on China for key strategic industries such as electric vehicles as soon as next week (Tuesday).

　　Lin Jian, a spokesman for the Ministry of Foreign Affairs, said that the imposition of 301 tariffs on China by the last US administration seriously interfered with the normal economic and trade exchanges between China and the United States and had been ruled by the World Trade Organization (WTO) as a violation of WTO rules. Instead of correcting the wrong practices, the United States continues to politicize economic and trade issues, abusing the so-called 301 tariff review procedure, and wants to further increase tariffs. This is adding to the mistakes.

　　Lin Jian said, we urge the US to abide by the WTO rules, cancel all tariffs imposed on China, and not to increase tariffs. China will take all necessary measures to defend its own rights and interests.

　　Sun Lei, a senior partner of Beijing Dacheng Law Firm, said in an interview with China Business News that the US action was suspected of violating the WTO agreement.

　　Sun Lei explained that, first of all, if this tariff is only levied on China, this practice violates the most-favored-nation treatment principle of the WTO, and the relevant most-favored-nation treatment principle of the WTO stipulates that all WTO members should be given the same most favorable trade treatment; Secondly, the tariffs that WTO members have negotiated and promised to reduce cannot be increased at will, so this practice also violates the tariff concession commitment made by the United States in the WTO.

　　About to tax

　　According to comprehensive reports, Biden government officials said that it is expected to announce an increase in tariffs on clean energy products from China on the 14 th local time, targeting key minerals from China.Products and.

　　Among them, electric vehicles are particularly concerned, and the tariff rate is expected to increase from the current 25% to about 100%. At the same time, all cars imported into the United States are subject to an additional tariff of 2.5%. This means that China’s overall tariff on electric vehicles exported to the United States will increase from 27.5% to 102.5%.

　　According to sources, the new tariffs on electric vehicles in China are not expected to apply to traditional gasoline-powered vehicles made in China.

　　This decision was made after a year-long review of China’s tariff policy during the Trump administration. Former US President Trump signed a presidential memorandum in 2018, imposing tariffs on about $370 billion of China’s products exported to the United States according to the results of the "301 investigation". After Biden took office, these tariffs were retained on the grounds of security considerations.

　　The Office of the United States Trade Representative (USTR) began a mandatory review in 2022, and the review procedure originally scheduled to end at the end of 2023 will announce the final result as soon as this week.

　　According to sources, tariffs on some industries that are considered to be of strategic significance to the US economy will be greatly increased, while tariffs on other industries that are considered to be less important to national security will remain unchanged or be lowered.

　　It can be seen that the announcement of the review results coincides with the intensification of the US election. AdamHodge, former assistant to Biden’s National Security Council and the Office of the US Trade Representative, told the media that the new tariffs, together with other policies promulgated by the US Treasury Department and the US Department of Commerce, should alleviate some anxiety of American voters.

　　Trump, the Republican candidate, recently responded to Biden’s message that he would impose a 200% tariff on China’s Mexican-made cars.

　　Earlier, on April 17th, the White House website published a message accusing China of unfair practices, and announced plans to take new restrictive measures against China’s steel and aluminum products, including increasing the 301 tariff on China’s steel and aluminum products to three times the current level, and cooperating with neighboring countries to prevent China’s steel and aluminum products from being indirectly exported to the United States.

　　In this regard, a spokesperson for the Ministry of Commerce said that China has noticed relevant news. The US accusation against China has no factual basis, and the relevant measures are typical unilateralism and protectionism, which China firmly opposes.

　　A spokesman for the Ministry of Commerce said, we urge the US to face up to its own problems, stop raising tariffs on Chinese products, and immediately cancel the measures to increase tariffs on China. China will take all necessary measures to defend its own rights and interests.

　　Ding Ru, an associate professor at the School of International Law of China University of Political Science and Law, has been tracking cases in the above fields for a long time. She told the First Financial Reporter that in the relevant cases, the US side has been ruled illegal by the WTO expert group. One reason is that the US side violated MFN treatment, and the other reason is that the US side unilaterally raised tariffs without authorization, which violated Article II of the General Agreement on Tariffs and Trade (GATT).

　　She explained that Article 2 of GATT clarifies the principle of tariff binding, and requires members to submit and abide by the tariff concession table when they join the WTO, and shall not arbitrarily raise the bound tax rate they have promised.

　　According to public information, the United States initiated a 301 investigation into China during the last administration, and then imposed tariffs. On April 4, 2018, the Ministry of Commerce of China filed a consultation request with the WTO dispute settlement mechanism on the taxation proposal under the US 301 investigation into China, and officially launched the WTO dispute settlement procedure.

　　On September 15, 2020, the WTO expert group issued an expert group report on the case of China v. US 301 tariff measures, and found that the US tax measures involved violated WTO obligations.

　　A spokesman for the Ministry of Commerce also said that the US side ignored the international economic and trade order and rules, politicized economic and trade issues, abused the so-called 301 tariff review procedure, and publicly demanded that the tariffs on China products be adjusted at will, thus shifting on contradictions, which was repeated mistakes and did not help solve the problems faced by domestic industries in the United States. American pressure on other countries to restrict China’s products will even undermine the security and stability of the global industrial chain supply chain.

　　How do China car companies face it?

　　What needs to be seen is that the potential measures of the Biden administration are not so much to suppress market segments as to prevent the expected import growth: China’s steel, aluminum and automobiles currently account for only a small part of the US supply.

　　Sun Lei also told China Business News that at present, China’s electric vehicles account for a small share of the US market, and the pain of increasing tariffs at this initial stage will be less. The logic of the United States is that if there is no intervention, the market share of China’s electric vehicles in the United States is bound to rise, and the cost of intervention will be higher after it becomes dependent on China’s supply chain.

　　It is noteworthy that many economic advisers of the Biden administration still have differences on whether to adjust the tariffs in the Trump era. US Trade Representative Dai Qi advocated raising tariffs, and the United States should take "early action and decisive action" to protect the American electric vehicle industry from China. Others, such as Finance Minister Yellen, called for lowering tariffs on consumer goods while focusing on strategic sectors.

　　In this regard, Sun Lei said that if it is a fact to impose tariffs on electric vehicles in China, in the short term,Car companies that invest and build factories in China have great influence. For example, if tariffs are imposed, cars currently produced in China will only be sold in China or other markets except the United States, which will lead to an increase in the fixed costs of car companies. However, super factories in Germany and other countries can digest and adjust this change.

　　Sun Lei said that for Chinese enterprises, the pressure to consider transferring investment will be greater, and the pace of decision-making will be accelerated. In addition, this change affects not only the electric vehicle industry. Because the supply chain of automobile products is very long, the migration of automobile assembly and production to other countries may lead to the inclusion of steel and aluminum, engine technology,The entire supply chain, including, is also affected.

　　What we can see is that while targeting China’s clean energy products, the Biden administration is also encouraging the determination of domestic clean energy investment in the United States.

　　At present, the Biden administration has injected more than $2 trillion into American factories and infrastructure in an attempt to strengthen American industry and cope with climate change.