The Biden administration is contemplating elevating tariffs on Chinese language EVs above 25%, The Wall Road Journal reported Thursday.

The administration has left in place Trump-era tariffs on roughly $300 billion of Chinese language items, however is now contemplating further tariffs, in accordance with the report, which cited nameless sources conversant in the matter.

Chinese language EVs are already topic to a 25% tariff, which comes on high of a 2.5% tariff on imported vehicles, The Wall Road Journal famous, including that the present tariff has already largely blocked backed Chinese language automakers from making inroads into the U.S. market.

2023 Nio ES8

Tariff will increase for Chinese language photo voltaic merchandise and EV battery packs are additionally being thought-about, in accordance with the report. This could observe restrictions on tax-credit qualification for EVs with Chinese language battery parts. Beginning January 1, U.S. “international entity of concern” necessities will exclude a rising variety of EVs from the tax credit score on account of Chinese language content material.

As The Wall Road Journal notes, elevated commerce restrictions would permit President Biden to look powerful on China in an election yr. However excessive tariffs might additionally exclude reasonably priced Chinese language EVs from the U.S. market, slowing the speed of EV adoption and thus going towards one other Biden coverage objective.

Chinese language electrical autos have elbowed in for a big a part of the market in Europe. Solely not too long ago have governments stepped in with steeper restrictions on incentives for China-made fashions—France simply this previous week, for example.

BYD Seal

They’re additionally robust in Mexico—the place, not too long ago, the Chinese language automaker BYD began promoting its Seal, one of many strongest rivals to the Tesla Mannequin 3 but—though it is probably the cheaper fashions the Biden administration is a bit more apprehensive about.

Polestar continues to see the numbers work for “made-in-China” with its Polestar 2, though that is a extra upscale car. And Polestar has discovered a workaround to the tax-credit restrictions with South Korea meeting for its upcoming Polestar 4, in addition to U.S. manufacturing for its Polestar 3.