tariffs

biden’s-new-import-rules-will-hit-e-bike-batteries-too

Biden’s new import rules will hit e-bike batteries too

ebike, ebikes, Policy, syndication, tariffs / /

tariff tussle —

The tariffs’ effects on the bike industry are still up in the air.

–

family on cargo e-bike

Last week, the Biden administration announced it would levy dramatic new tariffs on electric vehicles, electric vehicle batteries, and battery components imported into the United States from China. The move kicked off another round of global debate on how best to push the transportation industry toward an emissions-free future, and how global automotive manufacturers outside of China should compete with the Asian country’s well-engineered and low-cost car options.

But what is an electric vehicle exactly? China has dominated bicycle manufacturing, too; it was responsible for some 80 percent of US bicycle imports in 2021, according to one report. In cycling circles, the US’s new trade policies have raised questions about how much bicycle companies will have to pay to get Chinese-made bicycles and components into the US, and whether any new costs will get passed on to US customers.

On Wednesday, the Office of the United States Trade Representative—the US agency that creates trade policy—clarified that ebike batteries would be affected by the new policy, too.

In a written statement, Angela Perez, a spokesperson for the USTR, said that e-bike batteries imported from China on their own will be subject to new tariffs of 25 percent in 2026, up from 7.5 percent.

But it’s unclear whether imported complete e-bikes, as well as other cycling products including children’s bicycles and bicycle trailers, might be affected by new US trade policies. These products have technically been subject to 25 percent tariffs since the Trump administration. But US trade officials have consistently used exclusions to waive tariffs for many of those cycling products. The latest round of exclusions are set to expire at the end of this month.

Perez, the USTR spokesperson, said the future of tariff exclusions related to bicycles would be “addressed in the coming days.”

If the administration does not extend tariff exclusions for some Chinese-made bicycle products, “it will not help adoption” of e-bikes, says Matt Moore, the head of policy at the bicycle advocacy group PeopleForBikes. Following the announcement of additional tariffs on Chinese products earlier this month, PeopleForBikes urged its members to contact local representatives and advocate for an extension of the tariff exclusions. The group estimates tariff exclusions have saved the bike industry more than $130 million since 2018. It’s hard to pinpoint how much this has saved bicycle buyers, but in general, Moore says, companies that pay higher “landed costs”—that is, the cost of the product to get from the factory floor to an owner’s home—raise prices to cover their margins.

The tariff tussle comes as the US is in the midst of an extended electric bicycle boom. US sales of e-bikes peaked in 2022 at $903 million, up from $240 million in 2019, according to Circana’s Retail Tracking Service. Sales spiked as Americans looked for ways to get active and take advantage of the pandemic era’s empty streets. E-bike sales fell last year, but have ticked up by 4 percent since the start of 2024, according to Circana.

In the US, climate-conscious state and local governments have started to think more seriously about subsidizing electric bicycles in the way they have electric autos. States including Colorado and Hawaii give rebates to income-qualified residents. E-bike rebate programs in Denver and Connecticut were so popular among cyclists that they ran out of funding in days.

A paper published last year by researchers with the University of California, Davis, suggests these sorts of programs might work. It found that people who used local and state rebate programs to buy e-bikes reported bicycling more after their purchases. Almost 40 percent of respondents said they replaced at least one weekly car trip with their e-bike in the long-term—the kind of shift that could put a noticeable dent in carbon emissions.

This story originally appeared on wired.com

Biden’s new import rules will hit e-bike batteries too Read More »

biden-set-to-levy-100%-tariffs-on-chinese-evs-this-week

Biden set to levy 100% tariffs on Chinese EVs this week

biden administration, Cars, Chinese EVs, tariffs / /

The Chinese government does not have US consumer interests at heart —

Both the US and EU are deeply concerned about heavily subsidized Chinese OEMs.

–

The photo is filled with row after row of new SUVs, all painted white or grey.

Enlarge / New energy vehicles are being loaded into containers for export at Taicang Port and Taicang International Terminal in Suzhou, Jiangsu Province, China, on April 26, 2024.

Photo by Costfoto/NurPhoto via Getty Images

President Joe Biden is expected to levy new 100 percent tariffs targeted at specific Chinese industries, including electric vehicles, on Tuesday. The announcement follows growing calls from automakers, unions, and bipartisan efforts in Congress to address the problem of China unfairly subsidizing its own industries to undermine foreign competitors.

Why are Chinese EVs so cheap?

The Chinese government has been giving its green industries heavy direct subsidies for some time now, far in excess of those handed out by US or European governments. For EV makers like BYD, this has meant billions of dollars a year, in addition to the consumer-facing tax benefit for car buyers, similar to how EV sales are incentivized in the US.

Brands like BYD have concentrated on making their cars cheaper to build—only using one windshield wiper instead of two, for example—but also through vertical integration. Other than Tesla, automakers in the US, Europe, Japan, and Korea instead rely heavily on multiple tiers of suppliers, most of whom supply parts to more than one automaker.

Chinese EV makers have also embraced technology to a degree still not matched by other brands, with screens stretching across entire dashboards and online connected services (plus the associated government tracking) that are anathema to many Ars readers. (Indeed, in February, the US Department of Commerce opened an investigation into whether imported Chinese-connected cars pose a national security threat. The Chinese government has repeatedly restricted the places that Tesla drivers are allowed take their cars, as it considers them a threat to its own security.)

That has allowed Chinese automakers to sell their products in foreign markets at prices no one else can hope to compete with, undermining local industries in the process. This has been most relevant in Europe, where Chinese automakers like BYD and MG have already set up shop. Last year, 1 in 5 EVs sold in Europe were made in China; this year, it’s expected this number will rise to 1 in 4.

What’s everyone doing about it?

Last year, the European Union began an investigation into anticompetitive behavior by Chinese OEMs, and stronger EU tariffs on Chinese EVs are expected to be levied in the next few weeks.

Chinese car imports to the US are already subject to an additional 25 percent import tariff on top of the 2.5 percent tariff that applies to any car imported to the US. And Chinese brands have yet to enter the US market. If enacted this week, the new 102.5 percent tariffs would apply to Polestar and Lotus, both of which currently build their US-market EVs in China. But that doesn’t mean the industry isn’t terrified.

“If there are no trade barriers established, they will pretty much demolish most other car companies in the world,” said Tesla CEO Elon Musk in January.

“If you cannot compete fair and square with the Chinese around the world, then 20 percent to 30 percent of your revenue is at risk,” said Ford CEO Jim Farley in February.

It probably goes without saying that the United Auto Workers also thinks protecting the US auto industry is worthwhile. “The transition to cleaner technologies cannot be used to intensify the global race to the bottom through offshoring and low wages. We need to see movement by the administration to protect these jobs. The nascent EV industry needs tariff protections—otherwise we are going to be awash in imports. The stakes of the transition are high for American workers,” the union said in a statement in March.

US politicians have already passed laws to counter the threat of China dumping EVs here. The Inflation Reduction Act of 2022 revised how the IRS clean vehicle tax credit works; the consumer subsidy is now only eligible on vehicles assembled in North America. Each year, an increasing amount of the battery pack’s content and value must also have originated in the US or a country with which we have a free trade agreement in order to be eligible, and EVs with Chinese batteries are explicitly not eligible.

This year, senators on both sides of the aisle—most recently Sherrod Brown (D–Ohio)—have called for a ban on Chinese EV imports. And pressure from the US Trade Representative has seen the Mexican government promise not to offer incentives to Chinese EV makers looking to establish a beachhead inside the United States-Mexico-Canada Free Trade Agreement.

Biden set to levy 100% tariffs on Chinese EVs this week Read More »