That always happens with tariffs unless they are small. You ship the unfinished product somewhere else to be assembled. Sometimes it even makes more sense to ship a finalized product somewhere to then disassemble it and reassemble it in the same factory.
There are rules concerning how to determine the country of origin, involving how much value is added at each step. Final assembly doesn’t make the cut if the amount of work is too trivial. (The rules can be gamed somewhat but I’m sure the Biden administration will be putting this under a microscope.)
What is more problematic for Biden is that Chinese EV companies are building whole factories and supply chains in Mexico, so the product will be unambiguously Mexican and allowed to enter the US under the USMCA. If the US government feels strongly enough about keeping Chinese firms out simply on the basis of being Chinese, they will probably resort to threatening Mexico to strongarm them into shutting down those factories. The US has a long history of running roughshod over Mexico, so this seems pretty likely to me.
That always happens with tariffs unless they are small. You ship the unfinished product somewhere else to be assembled. Sometimes it even makes more sense to ship a finalized product somewhere to then disassemble it and reassemble it in the same factory.
There are rules concerning how to determine the country of origin, involving how much value is added at each step. Final assembly doesn’t make the cut if the amount of work is too trivial. (The rules can be gamed somewhat but I’m sure the Biden administration will be putting this under a microscope.)
What is more problematic for Biden is that Chinese EV companies are building whole factories and supply chains in Mexico, so the product will be unambiguously Mexican and allowed to enter the US under the USMCA. If the US government feels strongly enough about keeping Chinese firms out simply on the basis of being Chinese, they will probably resort to threatening Mexico to strongarm them into shutting down those factories. The US has a long history of running roughshod over Mexico, so this seems pretty likely to me.