Hawley Introduces Bill to Impose 100% Tariffs on Chinese Companies' Cars Built Anywhere

Sen. Josh Hawley wants the baseline tariff on cars made by Chinese companies to be 100%, not 2.5%, and to apply whether those cars are assembled in China, Thailand, Brazil, Hungary or Mexico.

"We need to hike the tariffs, and then we also need to close the back doors," Hawley said in a hallway interview at the Capitol on Feb. 28, the day he introduced the Protecting American Autoworkers from China Act. "What they're doing now is avoiding the Section 301 tariffs by assembling the cars ... in a third country."

The bill, as written, doesn't just apply to cars, but also snowmobiles, golf carts, off-road vehicles, motor homes, hearses and ambulances. However, it doesn't apply to light trucks, which have a 25% tariff. Those are under Harmonized Tariff Schedule heading 8704, and this bill only addresses HTS heading 8703.

The bill would cover any cars made by a company organized in China, or a subsidiary of a Chinese company.

When asked how changing the terms of USMCA to affect cars built in Mexico would affect our trading relationship with Mexico, Hawley replied, "Well, I hope it'll send a message, but most importantly, I hope it will protect American workers. I mean, my No. 1 focus is American autoworkers. Their jobs are in serious jeopardy. This administration's policies of mandating EVs while simultaneously ceding the market to China is a disaster."

The Alliance for American Manufacturing argued in a recent report (see 2402260017) that unless cars and car parts manufactured in Mexico by Chinese firms are excluded from USMCA, the U.S. auto manufacturing sector will be destroyed.

Beijing Automotive Industry Corporation assembles cars in Mexico for the Mexican market, and JAC Motors assembles an EV hatchback for the Mexican market in Mexico.

Hawley said since President Joe Biden says he wants a strong EV manufacturing sector in the U.S., "let's institute these tariffs and give our folks a shot to build that market, because otherwise, there are not going to be jobs left."

Hawley acknowledged that his earlier efforts to end most favored nation tariffs for China haven't progressed, but said his pitch on this bill is: "If you say that you support good-paying union jobs, then you ought to be all for this. This is about building up our domestic auto industry, and particularly our autoworkers. The corporations take care of themselves, but our workers, their jobs are on the line. I've seen it firsthand in my state."