US Treasury Secretary Janet Yellen recently reaffirmed the Biden administration’s dedication to enhancing the domestic electric vehicle (EV) sector and countering China’s growing exports in this field. Yellen, during her visit to a battery materials plant in Kentucky, emphasized the importance of a thriving domestic industry.

China’s surge in EV exports to global markets has sparked unease in Washington. The Biden administration is actively exploring strategies to protect US automakers and industry interests, recognizing the potential impact of Chinese EV exports on the American automotive sector.

While former President Donald Trump’s tariffs have limited Chinese EVs’ entry into the US market, Chinese EV giant BYD is already eyeing alternative routes like exports to Mexico. This move raises concerns about the future competitiveness of US automakers, prompting some senators to advocate for additional tariffs on Chinese EVs.

In response to mounting worries, the US Commerce Department has launched an investigation into the potential national security risks posed by Chinese vehicle imports, particularly regarding the data they transmit. This investigation may lead to further restrictions on both EVs and traditional vehicles, reshaping the international trade landscape in the automotive sector.

Yellen has underscored the importance of reducing US reliance on Chinese supply chains for EV components and minerals, especially in light of the Inflation Reduction Act. Provisions like “foreign entity of concern” rules aim to promote the utilization of domestically sourced materials in EV production while limiting Chinese content inclusion.

(With inputs from Reuters)