In a bid to protect domestic automakers, President Joe Biden recently unveiled plans to increase tariffs on China-made electric vehicles (EVs) by quadrupling the current import tax of around 25%. However, automotive and trade experts suggest that these tariffs will not be enough to prevent the influx of Chinese EVs on American roads.

The 100% tariff, announced on Tuesday, will apply to EVs imported from China. Despite the increase, there may still be room for Chinese models to undercut domestic prices, as they are often priced competitively. Furthermore, there are potential loopholes that could allow imports made by Chinese automakers in other countries, such as Mexico.

While the increased tariffs may act as a short-term protectionism measure, experts believe that they will only serve to delay Chinese automakers' entry into the US market, rather than halt it altogether. "They're going to be here. It's inevitable. It's just a matter of time," said Dan Hearsch, Americas co-leader of automotive and industrial practice at consulting firm AlixPartners. He added that Western automakers and suppliers need to be prepared to either compete or collaborate with Chinese counterparts.

The new tariffs on EVs, along with other increased rates on battery materials, are part of a larger set of tariff rates on $18 billion worth of Chinese imports. While Chinese automakers have made promises to sell vehicles in the US under their own brands for decades, none have succeeded thus far. However, recent years have seen significant improvements in the quality and build of vehicles made by Chinese automakers, thanks to subsidies from the government to boost domestic production.

This growth in domestic automakers has contributed to a decline in market share for global automakers like General Motors in China. Like their Chinese counterparts, American automakers have struggled to compete with the budget and mainstream Chinese vehicles, including EVs. For example, the BYD Seagull, a small EV backed by Warren Buffett, starts at around $10,000 and is reported to be profitable for the Chinese automaker. Although not yet available in the US, BYD is expanding globally, leading experts to believe that China-made vehicles will eventually make their way to American shores.

Even with the new 100% tariff, Chinese EVs may still be priced competitively compared to many EVs currently available in the US market. Analysts at Morgan Stanley suggest that while protectionism measures may pose short-term challenges for Chinese EV and parts makers aiming for global expansion, they are unlikely to hinder China's long-term push for EV dominance.

While gas-powered vehicles imported from China to the US are relatively small in number, a few Chinese vehicles are already being sold in the US, such as GM's Buick Envision, Ford's Lincoln Nautilus, and electric vehicles from Geely-owned Volvo and its spinoff brand, Polestar. Polestar, in particular, heavily relies on Chinese imports and is currently evaluating the impact of the tariff increases.

Biden's focus on China-made EVs aligns with his administration's clean energy agenda, which highlights the importance of electric vehicle production, adoption, and charging infrastructure development. The exclusion of gas-powered vehicles from the higher tariff rates reflects their commitment to resilient clean technology supply chains.

If successful in curbing Chinese exports, the new EV tariffs imposed by the Biden administration could have ripple effects on other countries, including Europe. Chinese automakers have already entered European markets and have gained significant market share. If similar tariffs are imposed elsewhere, this could prompt Chinese companies to establish local production operations or enter joint ventures to lower export costs.

As the US and China continue to navigate the complex automotive trade landscape, the future of Chinese EVs in the American market remains uncertain. However, it seems evident that despite the tariffs, the growth of Chinese automakers in the US is a matter of when, not if.