President Biden is set to impose increased tariffs on $18 billion worth of annual Chinese imports. The tariffs will apply to Chinese electric vehicles, semiconductors, solar cells, and more. How will these changes affect prices for consumers?
Yahoo Finance Senior Columnist Rick Newman and Autos Reporter Pras Subramanian join Wealth! to discuss the new protective policy.
For more expert insight and the latest market action, click here to watch this full episode of Wealth!
This post was written by Nicholas Jacobino
Video Transcript
Well, we’re going to kick things off with a deep dive into President Biden’s tariffs.
Biden is raising tariffs on clean energy goods from China that includes things like electric vehicles, batteries and solar panels even.
So let’s take a step back and define what a tariff is.
Tariffs are a tax imposed by one country on the goods and services imported from another country.
So why raise tariffs?
President Biden is concerned that China is using unfair trade practices to keep most of the global production and manufacturing in the country.
So in an effort to promote industry growth here in America, Biden is raising the rate of the tariffs on certain goods imported to the US from China, hoping American companies then will build more here at home.
Instead of buying from overseas for electric cars, the tariffs would quadruple from about 25% to over 100% on a Chinese made clean energy automobile.
So if you’re in the market for one of those products, how will higher tariffs impact the price that you pay?
Joining me now on this, we’ve got our very own process for many and Newman to break this down for pro let’s start with you because tariffs of 100% on ev sounds like a lot.
How much could this trickle down to consumers?
Well, the issue is that there aren’t really any Chinese made EV sold in America other than the Pulsar two, which is the, I mean, they, they sell a few 1000 of those every year.
Uh Pulsar hasn’t gotten back to me on how they’re going to respond to this.
But the fact of the matter is only basically less than like 2% of evs are made in China that are sold in the US, 1.3 million sold in the US last year.
Only a handful of those are, are Chinese made.
So not really gonna affect you much in the near term, but down the line, look, you’re gonna be sort of robbed from cheap Chinese evs that are actually probably pretty good.
Uh I again, a wide swath of Americans would actually like to drive these like to own a cheap EV but not be able to get that because of these policies.
But on the flip side of your, if you’re Joe Biden, you want to protect American industry to protect those jobs, potentially that could be kind of knocked out by the overcapacity problem of Chinese China’s evs.
Yeah, and we’re here, the tariffs in semiconductors, solar panels, will they be significant for us consumers as well?
I think it’s, I think it’s the same story.
This is meant to keep those products out in the future.
So it’s not going to have that much across the whole board.
And this is only about 15 categories of product just to put this in perspective when Trump imposed tariffs on Chinese imports.
Uh it was uh hundreds and hundreds of categories of products.
So this is very targeted.
It’s only going to be about $18 billion worth of products that are going to get a new tariff.
Uh under Trump, it was something like $300 billion.
Uh Oxford economics put an analysis out recently.
They said they think this is going to push up inflation by one this point.
OK. That’s 0.01.
So what, but what it is gonna do is it is gonna keep cheap products out of the market in the future.
So to go to go back to evs, um there’s a, there’s a Chinese E VA pretty good one you can get for $12,000.
Um We’re not gonna be able to buy that car or it’s gonna cost, um I don’t know, $24,000 if, if, if the manufacturer would decide, uh you know, that that’s another thing they could do, by the way, they might say, well, we’re just going to pay the tariff and send it here anyway, that’s what happened with some of the Trump tariffs is that the tariffs, the tariffs went on, the products kept coming or they went through third party countries.
So there’s a lot of gamesmanship here.
But this is not, it’s not going to affect any product for the most part that people are buying today.
Yeah, absolutely.
All right.
Well, we’re doing all this and tracking this in the March towards November as well.
We’ll see where this plays out in voters’ minds also here.
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