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How New Chinese Tariffs Could Affect Your Next Car

chinese ev tariffs 2024 exterior 01 jpg 2025 Volvo EX30 | Manufacturer image

The United States plans to raise tariffs on Chinese imports starting Aug. 1, with Chinese-made electric and plug-in hybrid vehicles facing 100% import duties. Other items used in automotive manufacturing, such as semiconductors and raw materials, also face a stiff jump in tariffs. While very few Chinese-built cars at all — much less Chinese plug-ins — are on American roads today, these policy changes could affect how American-market cars are made and which ones we will get to purchase in the future.

Related: 2025 Volvo EX30: Small Package and Price, Big Range

Higher Tariffs, Explained

The long-brewing trade war between the U.S. and China continues to heat up, with the Biden administration recently announcing a plan not just to keep the 2018 tariffs put in place by the previous administration, but to increase import duties on certain goods, including items related to electric vehicles and PHEVs, solar power, semiconductors and certain medical products.

Chinese-made plug-in electrified vehicles (including both full-EVs and PHEVs) get hit particularly hard, with import duties jumping from 25% to 100%, Reuters reports. Tariffs on semiconductors, which are used in the manufacturing of computer chips and other key electrical components, double to 50% under the new plan. Lithium-ion EV batteries, as well as certain aluminum and steel products, jump from 7.5% to 25%.

chinese ev tariffs 2024 exterior 06 jpg 2024 Volvo S90 Recharge plug-in hybrid | Manufacturer image

The administration wants to encourage domestic production of these items, especially in light of its recent investment in EVs and other green energy initiatives. China has invested heavily in its automotive industry, and it’s paying off for them, with a ton of competitive EVs going to market and the production capacity to export those EVs around the world. Today’s connected cars also collect a lot of user data, and advocates for these tariffs are wary of how an authoritarian Chinese state might use that data if relations between the U.S. and China continue to worsen.

You can read the U.S. Trade Representative’s full 52-page federal notice on the proposed tariff structure here. The USTR is seeking public comment on the proposed changes through June 28, after which the new tariff structure will be finalized and the first round of increases — including those on Chinese-made EVs — will go into effect on Aug. 1.

Which Cars Are Affected?

With big tariffs come big fears over which products may be discontinued in the U.S., as well as which ones might see a jump in price. Automakers contacted by were primarily in a wait-and-see mode until the new tariffs are finalized, but some companies are more affected than others — and are already shifting around where things are built.

The hardest hit company by these tariffs is Zhejiang Geely Holding Group, the Chinese parent company of Polestar and Volvo. The Polestar 2 and 3 as well as Volvo’s S90 Recharge and upcoming EX30 are all made in China and would be subject to the 100% import duty if it went into effect today. Even then, however, Geely only exported 2,217 cars from China to the U.S. in the first quarter of 2024, according to China Passenger Car Association numbers cited by Automotive News.

chinese ev tariffs 2024 exterior 05 jpg 2024 Polestar 2 | Manufacturer image

A Volvo representative who spoke to said that the company was still letting experts evaluate the new tariffs but did not expect them to change its U.S. product lineup. Production of the EX30 — a much-hyped small SUV with a starting price under $35,000 — is being added to Volvo’s Ghent plant in Belgium. Soon, production of U.S.-market EX30s will shift to Belgium, thus avoiding the 100% tariff.

Polestar, too, was still evaluating the situation when reached out for comment but confirmed that production of the Polestar 3 in South Carolina is set to begin in mid-2024. This additional production line in the U.S. was planned before the tariffs were announced; initial deliveries of the model are being built in China.

The Buick Envision and Lincoln Nautilus are also produced in China, but as neither has a battery that plugs into the wall, they are both exempt from the dreaded 100% tariff.

But Components Get Tariffed, Too

Remember, it isn’t only entire cars that will be affected by the new tariffs — Chinese components that go into other cars also face higher tariffs. Many key mineral components in EV batteries are now subject to the stiffer 25% penalty, although the tariff for graphite will be delayed until 2026 to allow American companies time to reconfigure their supply chains. That’s no small task, either, as about 77% of the world’s graphite came from China in 2023, per Statista. Decoupling from all of these Chinese imports is logistically challenging and could take years to accomplish.

chinese ev tariffs 2024 exterior 03 jpg Polestar 3 prototype | Manufacturer image

China’s heavily subsidized industry and low wages also drive down the cost of these components. Regardless of whether an automaker simply accepts the higher Chinese tariffs or shifts to sourcing parts in different countries, its production costs will rise. Thus, analysts who spoke with Automotive News believe that the new tariffs on Chinese imports will likely result in higher prices for consumers. Higher prices on a segment that’s already higher in price than its non-plug-in counterparts aren’t great when it comes to wooing new buyers over to electrified vehicles.

Partners and Loopholes

Many automakers are now looking toward international alliances to extend production beyond one country’s borders, essentially allowing them to be able to pull an EX30 as needed and shift production to countries with fewer trade barriers. This could be all the more important as the EU may instate higher tariffs on Chinese EVs that could go into effect as early as July 4, Bloomberg reports, and China is considering retaliatory trade measures aimed at American automakers, as well.

Geely is perhaps the most notable example here, given that its purchase of European marques Polestar, Lotus and Volvo gave it a solid manufacturing base in Europe. Additionally, Chinese lithium-ion battery companies now have manufacturing facilities in Europe and other Asian countries. Ford assembles localized versions of its Ranger and Bronco through joint ventures with Chinese auto companies, which could help it weather this current trade fight without losing too much market share in China. Stellantis has a partnership with Chinese EV company Zhejiang Leapmotor Technology Co. Ltd. to co-develop new vehicles for the European market, therefore giving it some access to some of China’s built-up EV know-how. Likewise, Volkswagen partnered with Chinese EV maker XPeng to co-develop new EV software with better features and more connectivity.

chinese ev tariffs 2024 exterior 02 jpg BYD Shark | Manufacturer image

Of particular concern to those who want to keep additional Chinese automakers out of the U.S. entirely is BYD’s plan to build a plant in Mexico, which has a favorable trade relationship with the U.S. through the United States-Mexico-Canada Agreement. At the moment, BYD says it has no plans to ship cars to the U.S. from its Mexican plant, per Automotive News. In theory, an EV built in Mexico wouldn’t be subject to the stiff 100% import duty slapped on the same car built in China. Even if the EV were built in Mexico using Chinese components, the import tariff drops to just 2.5%; if 75% of the vehicle’s components were made in North America, it could even enter the U.S. duty-free.

The U.S. may still cite national security or unfair competition concerns to try closing such loopholes for Chinese companies that set up shop in Mexico. Even if a company like BYD has no plans to sell its Mexican-made EV in the U.S., a Chinese auto plant in Mexico would also be competing for labor, resources and suppliers with American companies operating in the country, Automotive News notes. Suppliers may be more willing to work with heavily tariffed or banned Chinese materials to woo BYD’s business, for example, further increasing supply chain woes for North American automakers.

What Happens From Here?

We can’t predict the future, but there are two main schools of thought on how this will go. Some see these tariff increases as a necessary move to rely less on an adversarial state for essential goods, as well as to prevent China from subsidizing its car industry to the point where others can’t compete.

“Chinese overcapacity, combined with a healthy Chinese government subsidy, is a recipe for dumping,” writes Alliance for Automotive Innovation CEO John Bozzella. (The Alliance for Automotive Innovation is a trade group that lobbies on behalf of the American automotive industry.) “The competitiveness of the auto industry in the U.S. will be harmed if heavily subsidized Chinese EVs can be sold at below-market prices to U.S. consumers,” he continued.

chinese ev tariffs 2024 exterior 04 jpg 2025 Volvo EX30 | Manufacturer image

The United Auto Workers union also praised the move as further protecting American auto industry jobs against competition from cheap Chinese labor. “We have warned for many months that, left to the forces of corporate greed, the EV future was threatened by a race to the bottom, from China to Mexico to right here in the United States,” reads a UAW statement on the tariffs. “Making sure that major corporations have to pay a price for pitting worker against worker, pushing wages lower and lower, is a key part of a pro-worker trade policy.”

Others believe that the lack of competition with increasingly higher-quality Chinese electrified vehicles will lead to American manufacturers falling behind. “Instead of competing, [the American automakers would] rather just shut out competition entirely,” wrote InsideEVs’ Kevin Williams in a report from this year’s Shanghai auto show. “The concerns about cybersecurity don’t address the elephant in the room here: Your product sucks, compared to what China is putting out now. It doesn’t go as far. It’s not as well-made. It’s not as nice. It’s not as connected.”

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We’ll have to see how this works out in the years to come. American and Chinese manufacturers may not compete directly here, but they do in other international markets, where the Chinese are quickly gaining market share with inexpensive EVs.

Additionally, these tariffs aren’t an outright ban; they simply make Chinese cars more expensive to import. If you were hoping some of those ultra-cheap Chinese EVs would come here — either to purchase one yourself or to force prices down across the entire American EV market — well, they likely won’t be that cheap if they do.

Related Video:’s Editorial department is your source for automotive news and reviews. In line with’s long-standing ethics policy, editors and reviewers don’t accept gifts or free trips from automakers. The Editorial department is independent of’s advertising, sales and sponsored content departments.

Photo of Stef Schrader
News Editor Stef Schrader joined in 2024 but began her career in automotive journalism in 2013. She currently has a Porsche 944 and Volkswagen 411 that are racecars and a Mitsubishi Lancer GTS that isn’t a racecar (but sometimes goes on track anyway). Ask her about Fisher-Price Puffalumps. Email Stef Schrader

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