The cars facing new or increased U.S. tariffs are primarily those manufactured in China, including certain models from brands like Volvo (owned by China's Geely) and Polestar. This is a result of the Biden administration's recent Section 301 tariffs aimed at boosting American electric vehicle (EV) production. While the immediate focus is on Chinese EVs, the policy also impacts solar cells, steel, and other goods. Importantly, the 25% tariff on automotive imports from many other countries (often called the "chicken tax") has been in place for decades and continues to apply to most light trucks and vans.
The new tariffs specifically target the clean energy sector. The tariff rate on Chinese EVs has skyrocketed from 25% to 100%, effectively closing the door to affordable models that are popular in Europe and Asia. For example, the Polestar 2, which is built in China, is directly affected. The Volvo S90 Recharge, another Chinese-made vehicle, also faces these new tariffs.
Beyond complete vehicles, the policy extends to batteries and critical minerals. Tariffs on lithium-ion EV batteries are set to increase, impacting the supply chain for all automakers, including those building cars in North America. This is designed to incentivize the development of a domestic battery production ecosystem.
The long-term goal is to protect and grow the U.S. auto industry, particularly its EV segment, from heavily subsidized Chinese competition. For American consumers, the immediate effect is limited because very few Chinese cars were previously sold here. However, it likely means higher prices for any future Chinese models and could influence the cost of EVs more broadly as the battery supply chain adjusts.
| Vehicle/Economic Factor | Previous Tariff Rate | New Tariff Rate (2024) | Key Impact |
|---|
| Electric Vehicles (from China) | 25% | 100% | Effectively blocks imports of affordable Chinese EVs (e.g., Polestar 2, Volvo S90 Recharge). |
| Lithium-Ion EV Batteries | 7.5% | 25% | Increases production costs for all automakers using Chinese battery imports. |
| Natural Graphite & Other Critical Minerals | 0% | 25% | Aims to secure a North American supply chain for battery components. |
| Solar Cells | 25% | 50% | Part of broader clean energy industrial policy, separate from autos. |
| Light Trucks/Vans (Globally, via "Chicken Tax") | 25% | 25% | This long-standing tariff remains unchanged, affecting models not built in North America. |
