The Biden administration has warned Chinese electric vehicle manufacturers that they may face additional penalties if they try to avoid new import tariffs by transferring production to Mexico. U.S. President Joe Biden last week ordered total tariffs of up to 102% on Chinese electric vehicles and imposed new tariffs on other products including steel, aluminum, computer chips, and solar cells. BYD, a Chinese electric vehicle company, previously expressed interest in seeking factory space in the Mexican market, raising concerns that they may be using Mexico as a way to enter the U.S. market.

When asked about the new tariffs at a White House press conference, U.S. Trade Representative Katherine Tai said, "We are discussing whether additional punitive measures are necessary, so stay tuned. If China imposes any penalties on the factories, we will review them under Section 301 of the Trade Act of 1974 to determine the legal basis.