The United States has formally expressed concerns about China’s alleged dumping attempts on electric vehicles and other items, stating it will respond collectively with its allies. The U.S. aims to build a “battery alliance front” with allies such as South Korea and the European Union (EU) to counter China’s overproduction and low-cost offensive by increasing anti-dumping pressure under the Inflation Reduction Act (IRA). This strategy presents an opportunity for Korean companies that will play a vital role in the U.S. battery supply chain.
The Financial Times (FT) reported on the 19th (local time) that Jay Shambaugh, Under Secretary of the U.S. Treasury for International Affairs, expressed concerns about the dumping to Chinese Vice Chairman Hu Chunhua, who oversees Chinese economic policy. The two parties reportedly discussed this issue during the third meeting of the U.S.-China Economic Working Group in Beijing earlier this month.
The FT stated, “The U.S. is particularly concerned about China’s excessive exports in advanced manufacturing sectors such as electric vehicles, solar panels, and lithium-ion batteries.” The U.S. believes that China is not showing sincerity in resolving overproduction. In an interview with FT, Under Secretary Shambaugh said, “China’s industrial support and macroeconomic policies are more focused on supply than demand creation,” and emphasized, “There are concerns that China’s overproduction could hit the global market, and countries have no choice but to respond.” Groundwork exists for the U.S. and its allies to respond to China’s low-cost offensive jointly. The EU has been pressuring the Chinese electric vehicle industry in step with the U.S., including investigating Chinese government subsidies for the electric vehicle industry since last year. EU Competition Commissioner Margrethe Vestager also mentioned, “We are prepared to use tools such as tariffs to respond to unfair Chinese trade practices.”
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