The Big Tariffs are here - by Noah Smith - Noahpinion

Joe Biden is about to slap 100% tariffs on Chinese-made electric vehicles. A 100% tariff is an absolutely huge tariff. It means that Chinese EV makers would have to sell their EVs in the U.S. at half the price of EVs manufactured elsewhere in order to be competitive. That just isn’t going to happen.

A 100% tariff will probably be enough to keep essentially all made-in-China EVs out of the U.S. The Rhodium Group recently came out with a report called “ Ain’t No Duty High Enough”, arguing that Europe would need 40-50% tariffs to keep Chinese EVs out:

The European Commission is likely to impose countervailing duties on imports of electric vehicles (EV) from China in the coming months to head off the risk of subsidized cars damaging Europe’s auto industry. We expect the Commission to impose duties in the 15-30% range. But even if the duties come in at the higher end of this range, some China-based producers will still be able to generate comfortable profit margins on the cars they export to Europe because of the substantial cost advantages they enjoy. Duties in the 40-50% range—arguably even higher for vertically integrated manufacturers like BYD—would probably be necessary to make the European market unattractive for Chinese EV exporters. As countervailing duties at this level are unlikely, policymakers in Brussels may decide to turn to non-traditional tools to shield the European auto industry, including restrictions based on environmental or national security-related factors.

Well, Rhodium is right that non-tariff barriers — basically, sneakily crafted regulation that foreign products can’t satisfy but domestic products can — are pretty effective in shutting out imports. And they may be right that 40-50% tariffs will be politically impossible in Europe. But Biden’s new tariff is double the rate Rhodium mentions. That’s just going to nuke all Chinese EV exports to the U.S.

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