Four subsidiaries of Chinese car manufacturer BYD filed a lawsuit against the United States Government due to executive orders relating to the application of customs duties, local press reported this Monday, 9th.
In the lawsuit, filed at the end of January at the United States Court of International Trade, the companies claim that Washington does not have the authority to impose tariffs under the International Emergency Economic Powers Act (IEEPA), and demand the annulment of the executive orders that underpinned the customs duties, as well as the refund of the amounts charged, plus interest.
The complaint is directed not only against the US Government, but also against senior officials at the Department of Homeland Security, the Department of the Treasury, the Office of the Trade Representative and the Customs and Border Protection Agency.
According to the official Chinese newspaper Global Times, this is the first time that a Chinese automobile company has directly challenged, through court, the tariffs imposed by Washington, which “creates a precedent” for other companies in the country to “legally defend their rights and legitimate interests”.
For Sun Xiaohong, director of the automotive department at the Chinese Chamber of Commerce for the Import and Export of Machinery and Electronic Products, these tariffs not only affect manufacturers but also represent a “serious challenge” to the stability of global supply chains.
Despite considering that the process will face “difficulties” and that its outcome is “uncertain”, Sun believes that BYD’s initiative could serve as a “significant guide” for other Chinese companies that intend to follow the same legal path.
Although the trade conflict intensified with the return of Donald Trump to the White House, it was during the Joe Biden Administration (2021–2025) that 100% tariffs were applied to the import of electric vehicles from China, a percentage that increased to 135% after new rounds of increases and negotiations led by the current President.
According to the specialized portal CarNewsChina, if BYD, which is the world’s largest seller of electric vehicles, wins the case, it will be able to access the North American market with vehicles manufactured in its units in Brazil, subject to tariffs lower than 15%, in addition to being able to reactivate the plan to install a large factory in Mexico, currently suspended.
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