Last week, we asked how concerned you all were about the new U.S. tariffs on Chinese goods. While the response was definitely a mixed bag, it seems the majority of you are at least “Mildly Concerned.”
🟨🟨🟨🟨 🔴 Highly Concerned - Higher import duties will raise the cost of vehicles and parts, leading to increased prices for consumers.
🟩🟩🟩🟩 🟡 Mildly Concerned - There will be some cost increases, but the benefit of increased domestic manufacturing outweighs the negatives.
🟨🟨🟨🟨 🟢 Not Concerned - The tariffs will have little to no effect on dealerships due to already low import levels of Chinese EVs.
So, we wanted to take a closer look at what these tariffs will actually affect and what it may mean for the future of auto.
The new wave tariffs target over $18B worth of Chinese goods on things like electric vehicles, batteries, and critical minerals in an effort to boost domestic production and curb what the U.S. gov sees as unfair trade practices.
While this might sound like a bold move, it seems it may be more about maintaining the status quo than shaking things up.
⚡️ EVs — One of the biggest headlines from the increase came from new tariffs that hike up the cost of Chinese electric vehicles a staggering 100%. While China is the world’s largest producer of EVs, the U.S. already imports very few due to existing trade restrictions, but this move ensures Chinese EVs don’t gain an advantage despite their competitive pricing.
🪫 Battery Supply Chain — Tariffs on Chinese lithium-ion batteries will rise from 7.5% to 25%. Given that China supplies about two-thirds of U.S. EV battery imports, this probably should have been the bigger headline.
💎 Critical Minerals — New tariffs on critical minerals essential for battery production and semiconductors will also increase from 0% to 25% by 2026. This gives suppliers some time to diversify away from Chinese sources, though it’s a tough ask given China’s current dominance in this sector.
🎬 Final Thoughts — While these tariffs may be more preventative than dramatic, it’s important to remember that tariffs are not paid by China but by U.S. importers who ultimately pass those costs on to domestic consumers. A valid concern when affordability is already a major issue for many American buyers.