Investing.com – Shares of China’s largest electric vehicle makers fell on Friday after multiple reports suggested the U.S. was preparing new tariffs on Chinese companies, specifically targeting electric vehicles and other key industries.
Lee Auto Shares of Inc (HK:) (NASDAQ:), NIO Inc (HK:) (NYSE:), BYD (HK:) and Geely Automobile (HK:) fell between 1% and 4% in Hong Kong trading, missing a jump of 1.5%. in the index.
Xiaomi Shares of (OTC:) Corp (HK:), which recently entered the electric vehicle sector with its SU7 model, fell 0.9%, while shares of battery giant Contemporary Amperex Technology (SZ:) fell 2.2% as reports say that the Chinese battery industry will also be targeted. .
Reports from Bloomberg and Reuters said U.S. President Joe Biden could announce new tariffs on China as soon as next week, extending some levies that were imposed by former President Donald Trump.
But the new tariffs will be much more targeted than Trump-era levies, focusing on key strategic sectors such as electric vehicles, batteries and solar energy equipment.
Any US tariffs on Chinese electric vehicle makers are expected to undermine their international expansion plans. But concerns that cheap Chinese electric vehicles are dominating the U.S. and European markets are also causing concern among other major automakers.
Tariffs on the Chinese battery industry could also be a headwind for U.S. electric vehicle makers, given their dependence on China for battery technology. CATL, for example, has numerous partnerships with Tesla Inc (NASDAQ:) and Ford Motor Company (NYSE:) to supply battery technology for their vehicles.
Any additional trade tariffs also risk retaliation from China, given that relations between the world’s two largest economies are already frayed.
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But the actual impact of the tariffs on Chinese electric vehicle makers remains unclear, given that they still sell most of their vehicles in the domestic market. Demand for electric vehicles in China remains key in a weak global auto market.