The United States Trade Representative, Katherine Tai, stated on Wednesday, April 17, that the United States must take decisive action to protect the American electric vehicle (EV) industry from the impact of Chinese subsidies.
Tai expressed during a hearing at the Senate Finance Committee that the U.S. needs to create a fair competitive environment for American workers.
She mentioned, “Over the years, we have seen non-market policies and practices from the CCP that, if left unchecked, will destroy many of our country’s worker communities and industries.”
The U.S. Trade Representative’s office is close to completing a review of tariffs on China from the Trump era. Tai highlighted that after this review, the U.S. will be able to more effectively and strategically address the harm caused by Chinese technology transfer policies and the imbalance and inequality in U.S.-China trade relations.
Tai pointed out that the CCP’s “anti-competitive practices,” including “significant state support,” led to excessive production of solar panels a decade ago, severely impacting American manufacturers. Similar situations are now being faced in the electric vehicle and automotive sectors, and ignoring them will result in the U.S. losing the ability to produce these products.
She emphasized, “Therefore, we must take action early, take decisive action, and we must be clear about why we are taking action.”
“We are pursuing a fair competitive environment; the current competitive environment is not fair, despite our constant talk about free trade,” Tai added.
The current dynamics in the global electric vehicle industry are cited as an important factor in the Biden administration’s review of trade tools.
On Wednesday, President Biden visited Pittsburgh, Pennsylvania and in his address to steelworkers, he mentioned that Chinese steel companies produce steel far beyond domestic demand, leading to unfair dumping of excess steel at low prices in the global market. Biden suggested that if investigations confirm China’s anti-competitive trade practices, the U.S. Trade Representative should triple the tariffs on imported steel and aluminum from China.
Tai noted that the interagency review work has entered a “very, very deep stage” and expects to reach conclusions soon.
The U.S. Trade Representative’s office announced on Wednesday a new investigation into “behavior, policies, and practices” dominating China’s shipping, logistics, and shipbuilding industry for unfair trade practices.
The investigation, based on petitions from five U.S. unions, will proceed under Section 301 of the Trade Act of 1974. In 2018, President Trump imposed tariffs on billions of dollars worth of Chinese imports under this regulation.
“Petitions from these unions have raised serious concerns about the damage to American labor, shipbuilding industry, and American resilience,” said Tai.
Some senators have urged Tai to use the Section 301 tariff review measures initiated in September 2022 to impose higher tariffs on Chinese-made electric vehicles.
Tai emphasized that any adjustments will be part of a “comprehensive plan” and expressed confidence in swiftly completing the process.