In May, President Joe Biden announced a massive escalation of the US-China trade war. Donald Trump’s China tariffs are here to stay, and tariffs on sectors crucial to the green transition are ramping up to 25% on lithium-ion batteries, 50% on semiconductors, and a staggering 100% on electric vehicles (EVs). Canada soon imposed its own 100% EV tariff, while a divided EU settled on a more conservative 45%.

The EU’s hesitancy was understandable. More than 20% of its EV imports come from China, with cars made by the Chinese giants BYD and SAIC actually showing up on European roads. For the United States and Canada, the decision was easier: China’s share of US EV imports is just 1%–2%, and most of the Chinese-manufactured vehicles Canada imports are Teslas, which it can also buy from the United States. US consumers are unlikely to see any direct price increases from the tariffs  —  but they may lose out on the opportunityto purchase an EV from BYD or SAIC, whose cars can retail for less than $30,000. To critics of Biden’s policy, this looks like a move that could sabotage the green transition in order to win votes from China hawks and Midwest auto-manufacturing states.

Biden’s defenders point to the potentially job-killing competitiveness of Chinese EV firms, which have benefited from more than $29 billion in state subsidies since 2009. Whether the new tariffs create American jobs and support the country’s decarbonization will depend on the ability of its own industrial policy to fill the gap, incentivizing the production of affordable domestic EVs. This was among the key goals of Biden’s Inflation Reduction Act (IRA), the largest piece of climate legislation in US history. So far, the IRA’s $7,500 tax credit for US-made EVs has produced mixed results: EV sales have soared since the act passed in 2022, although EVs still account for only around 9% of the market and major automakers like Ford and General Motors have pushed back their EV rollouts. Should the incoming Trump administration maintain Biden’s tariffs while slashing his tax incentives, the outlook may grow much darker.