U.S. lawmakers want Biden to hike tariffs on Chinese-made vehicles

WASHINGTON — A bipartisan group of U.S. lawmakers want the Biden administration to hike tariffs on Chinese-made vehicles and investigate ways to prevent Chinese companies from exporting to the United States from Mexico.

Representative Mike Gallagher, a Republican who chairs a select committee on China, the panel's top Democrat Raja Krishnamoorthi, and Michigan Representatives Haley Stevens and John Moolenaar urged U.S. Trade Representative Katherine Tai in a letter to boost the current 25% tariff on Chinese vehicles.

"It is critical that tariffs on (Chinese) automobiles not only be maintained but also increased to stem the expected surge in (Chinese) imports," they wrote in the previously unreported letter seen by Reuters.

USTR and the Chinese Embassy in Washington did not immediately respond to requests for comment. The 25% Chinese auto tariffs were imposed during the administration of then President Donald Trump and extended by the Biden administration.

The letter said the USTR should consider launching a new Section 301 investigation into Chinese vehicles "and the harm they pose to the American automotive industry and American workers and what actions should be taken to counter (China's) industrial strategy to dominate the global automobile market."

The letter also said the United States "must also be prepared to address the coming wave of (Chinese) vehicles that will be exported from our other trading partners, such as Mexico, as (Chinese) automakers look to strategically establish operations outside of (China) to take advantage of preferential access to the U.S. market through our free trade agreements."

Automakers in the United States have raised concerns about Chinese automakers.

Alliance for Automotive Innovation CEO John Bozzella said in June proposed U.S. environmental regulations could let China gain "a stronger foothold in America’s electric vehicle battery supply chain and eventually our automotive market."

In September, the European Commission launched an investigation into whether to impose punitive tariffs to protect European Union producers against cheaper Chinese electric vehicle (EV) imports.

The lawmakers said the United States should work with allies "to impose a coordinated response that collectively dampens demand in our markets."

The letter noted "many of the EVs exported from the PRC are made by Western brands, such as Tesla, that have significant production capacity" in China.

Lawmakers noted some U.S. automakers are exporting Chinese-made vehicles to the United States, which they said underscores that the current tariff level on imported vehicles is insufficient.