© 2024 South Carolina Public Radio
Play Live Radio
Next Up:
0:00
0:00
0:00 0:00
Available On Air Stations
South Carolina Public Radio's offices will be closed Monday, May 27, in observance of the Memorial Day holiday. Our local news and programming will return Tuesday, May 28.

High tariffs are keeping affordable Chinese-made EVs out of the U.S. for now

STEVE INSKEEP, HOST:

Let's follow up on the Beijing auto show. We reported this week on the new models, including many electric and hybrid cars for Chinese companies, like BYD.

Dramatic shots of a red vehicle.

(SOUNDBITE OF MUSIC)

INSKEEP: There it is - a red sports car.

Turned out to be a hatchback with a tail fin. Some Chinese companies have global ambitions and big expansion plans, but almost none of the cars we saw in Beijing are available in the United States. NPR's cars and energy correspondent Camila Domonoske is covering this. Good morning.

CAMILA DOMONOSKE, BYLINE: Good morning.

INSKEEP: OK. So why could I not buy one of those cars here if I wanted to?

DOMONOSKE: Well, mostly because the federal government is keeping them out on purpose. It is hard to break into the U.S. market. There are very strict safety standards, so you have to figure out the whole dealership system. But the biggest barrier is this 27.5% tariff on Chinese-made vehicles that was imposed by former President Trump and continued by President Biden.

It's still possible to sell Chinese cars in the U.S. Notably, Volvo is actually bringing a small SUV made in China to the states this summer. But these tariffs could increase, and there is currently an investigation by the Commerce Department that could even result in a prohibition, possibly, on some Chinese vehicles.

INSKEEP: Why would the United States want to limit American access to Chinese cars?

DOMONOSKE: Three reasons. The first one is national security. That investigation by the Commerce Department - that's focused on whether high-tech cars could spy on Americans and send data back to China.

INSKEEP: OK.

DOMONOSKE: The second reason is economics. Chinese EVs in particular are a lot cheaper than any EV for sale in the U.S. And there's concern that, by undercutting everything on prices, they would seriously damage a major U.S. industry and result in things like factory closures, job losses, which leads to point No. 3, which is politics. These tariffs, which make Chinese imports more expensive - they have been popular, and there's bipartisan support in Washington, D.C., for these kinds of policies.

INSKEEP: Well, I suppose that price is a key factor. And of course, Americans will have accusations about how China is making the cars so cheaply or selling them so cheaply. But in any case, prices are low in China right now. There's an actual price war in China over EVs. Is it possible to make them that cheap in the United States?

DOMONOSKE: Well, as you mentioned, there's some elements of how prices are so low that certainly the U.S. wouldn't want to replicate - human rights concerns about labor being an obvious point. There's also China's subsidies. The U.S. is subsidizing electric vehicles, but China's subsidies have been huge, and they have a massive head start.

That said, there are things that automakers can do, including just making smaller vehicles. They're not going to be able to make a $10,000 vehicle like you can buy in China, but multiple carmakers are trying to bring a $25,000 vehicle to market. They just haven't done it yet.

INSKEEP: This is reminding me of a debate over solar panels, where the United States would like to encourage people to use renewable energy, but then they're upset about cheap Chinese solar panels flooding the market. Is there something similar going on now with electric cars?

DOMONOSKE: Absolutely. That's a comparison people brought up a lot when I was doing interviews on this. I did speak to several climate groups who made a possibly surprising argument that there's a climate case for keeping tariffs in place to buy time for the auto industry to make big changes. Of course, there's not much time from the climate perspective, from the point of view of drivers who want cheap EVs or for the automakers who ultimately need to compete on a global market with these vehicles.

INSKEEP: Camila, I really appreciate your insights on this. Thanks so much.

DOMONOSKE: Thank you.

INSKEEP: That's NPR's Camila Domonoske.

(SOUNDBITE OF JONAS BLUE SONG, "FAST CAR (FEAT. DAKOTA)") Transcript provided by NPR, Copyright NPR.

NPR transcripts are created on a rush deadline by an NPR contractor. This text may not be in its final form and may be updated or revised in the future. Accuracy and availability may vary. The authoritative record of NPR’s programming is the audio record.

Tags
Steve Inskeep is a host of NPR's Morning Edition, as well as NPR's morning news podcast Up First.
Camila Flamiano Domonoske covers cars, energy and the future of mobility for NPR's Business Desk.