Rep. Banks Calls on White House to Impose Section 232 Tariffs on Chinese EVs

Select Committee on the Chinese Communist Party Member Rep. Jim Banks (IN-03) is calling on Secretary of Commerce Gina M. Raimondo to open an investigation into the national security threat posed by imports of Chinese electric vehicles and their components under Section 232 of the Trade Expansion Act of 1962. Rep. Banks’ letter calls for global Section 232 tariffs on the basis of rapidly growing national security risks of Chinese EV imports, including those sent to the U.S. via third countries. Read Rep. Banks’ letter here.

Said Rep. Banks: “Joe Biden staked America’s national security and our entire auto industry on the success of his EV transition, and right now China is eating our lunch. The White House must either let go of its green energy dreams or respond to China’s predatory EV trade practices. Sleepwalking towards disaster will cost tens of thousands of Hoosier autoworkers their jobs and cripple our defense industrial base. Domestic manufacturers are already struggling and our adversaries are already emboldened, but we haven’t hit the floor of the Biden agenda yet.”

Key Quotes from Letter:

“I strongly disagree with the Biden administration’s EV policies…that said… because your administration has decided to force EVs upon the American automotive sector and on American consumers, you must also ensure that these vehicles are made in the United States.”

“China now accounts for 35 percent of global EV exports, compared to a mere 4.2 percent in 2018. This rapid growth does not reflect innocent competitive success. Rather, a “decade-old industry promotion policy of incentives and subsidies” has enabled China to sell its EVs at rock-bottom prices and in record numbers.”

“subsidized Chinese exports undermine national security by eroding the U.S. industrial base and R&D network, a process that Commerce has already identified as a threat to national security in its previous Section 232 investigation…. [EV] batteries may enable Chinese intelligence collection and even sabotage. A recent report from the Foundation for Defense of Democracies described this threat in detail”

“Comprehensive global action under Section 232 is imperative… [because] batteries and other components manufactured by Chinese entities are entering the U.S. market by being incorporated into EVs that have been manufactured outside China…China has a long history of circumventing tariffs by performing the majority of a given product’s manufacturing steps in China and then shipping the product to a third country for relatively minor finishing steps, allowing the product to claim origin in the third country instead of China. China also moves its manufacturing facilities into third countries directly.”

Additional Background:

  1. In February 2024, China’s largest EV manufacturer BYD announced its plans to circumvent President Trump’s 2019 auto tariffs by building an EV factory in Mexico.
  2. Rep. Banks published an op-ed in the Indianapolis Star in February 2023 arguing that the Biden administration’s proposed EV transition will leave Hoosier autoworkers unemployed or underpaid. 
  3. Last week, Rep. Banks was an original cosponsor of Rep. Rick Crawford and Frank Mrvan’s Stop Mexico’s Steel Surge Act to reinstate 25% Section 232 tariffs on Mexican steel imports until Mexico starts complying with the 2019 agreement.

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