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According to Bloomberg, President Joe Biden will announce a significant increase in tariffs on Chinese goods, focusing on electric vehicles (EVs) and related sectors.

The move has drawn criticism from former President Donald Trump and sparked a response in U.S. auto stocks, with Ford (NYSE: F), Tesla (Nasdaq: TSLA), and General Motors (NYSE: GM) seeing gains over the trading session today.

US to Increase Tariffs on Chinese EVs to 102.5%: Report

Under the new measures, tariffs on Chinese EVs can rise from 27.5% to 102.5%. Other sectors, including batteries, solar cells, steel, and aluminum, will also see tariff hikes, though specific rates will vary. The Biden administration has framed these actions as a defense of American workers and an effort to protect the U.S. market from subsidized Chinese goods.

During a recent campaign rally, former President Donald Trump criticized Biden’s tariff increases, arguing that such measures should have been implemented years ago.

He also pointed out a potential loophole involving Chinese companies building cars in Mexico to bypass U.S. tariffs under the US-Mexico-Canada Agreement (USMCA).

“I will put a 200% tax on every car that comes in from those plants, and they’re not going to do that,” Trump said. He reiterated his call for a 60% tariff on all Chinese goods, which the Biden administration has avoided, likely due to concerns about fueling inflation.

US Auto Stocks Rise After the News

Following the news, U.S. auto stocks experienced significant gains. Tesla Inc., trading at $173.99, saw a 3.27% increase, although its year-to-date performance remains down by 29.91%. Despite recent challenges, Tesla’s market cap remains substantial at approximately $555.654 billion.

Ford Motor Company’s stock price increased by 3.06% to $12.36, with a year-to-date performance up by 5.54%. In response to changing trade policies, the company has been adjusting its executive team and focusing on expanding its electric vehicle lineup.

General Motors Company experienced a 3.42% increase, with its stock price reaching $45.90. The company’s year-to-date performance is significantly positive, with a 28.15% increase. GM’s strategy includes ending production of specific traditional models like the Chevy Malibu and pivoting more towards electric vehicles, which could benefit from the changing tariff landscape.

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