- Auto suppliers and manufacturers are asking the United States to reduce tariffs on a range of Chinese goods.
- Tesla and SK Innovation say they can’t get graphite for electric car batteries from anywhere else.
- President Trump imposed heavy duties on Chinese imports worth hundreds of billions in 2018.
Auto suppliers and manufacturers, including Tesla, are urging the US government to waive tariffs on a range of key Chinese components, especially for electric car batteries.
Applications come at a busy time for global supply chains. A record number of container vessels are stranded off the coast of California, and supplies of all kinds of household and industrial goods are in short supply. In the automotive world, shortages and shortages in the supply chain – especially computer chips – have forced carmakers to cut production sharply, pushing up new car prices.
In October, the US Trade Representative began accepting public comments from companies seeking tariff exemptions on certain Chinese imports that were subject to additional duties during President Trump’s 2018 trade war with the country. It had previously issued 2,200 emissions, but most of them expired in 2020. .
The USTR said it would consider waiving tariffs that only affect products purchased from China or “cause serious economic harm to commentators or other US interests.” The public comment period ended on Wednesday.
Tesla on Wednesday argued to USTR in three comments that it could not find the synthetic or natural graphite required for the battery pack anywhere outside of China, CNBC reported earlier.
“Tesla has concluded that no company in the United States is currently capable of producing synthetic graphite that meets the specifications and capabilities required for Tesla’s production,” said the electric car maker.
Several times over the past year, Tesla CEO Elon Musk and other company executives have explained how the shortage of spare parts and ports has affected Tesla’s manufacturing. The company has increased the prices of its cars by thousands of dollars over the past year, and the waiting time for some models is more than a year.
SK Innovation, a South Korean battery maker that sells cells to Ford and Volkswagen, made a similar request. The company recently announced a joint venture with Ford, BlueOvalSK for three plants that will provide the automaker with batteries for its growing lineup of electric vehicles.
Dozens of other automotive suppliers, large and small, are demanding tariff breaks on countless switches, sensors, motors, and other vehicle parts.
Manufacturing juggernaut Magna and its subsidiaries want emissions for electric motors that enable car seats to be adjusted, circuit boards used in modern safety systems, and steel shafts used in automatic transmissions. Bush wants the same for the wheel speed sensors used in his anti-lock braking system. SMR Automotive Systems, which provides carmakers with rear view and side view mirrors, is seeking discounts for certain types of mirrors.
“All rearview mirror glass vendors for auto manufacturers are located outside the United States,” the company said.
Some industry observers say the supply chain crisis is getting worse. However, some analysts say the shortage of computer chips and the impact on new car prices could last for years. Relief in tariffs for the auto industry could help alleviate some of this growing pressure on pricing.