mobile money business plan pdf

Mobile Money Transfer Agency Business Plan [Sample Template]

By: Author Tony Martins Ajaero

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Are you about starting a money transfer agency? If YES, here is a complete sample money transfer agency business plan template & feasibility report you can use for FREE .

Okay, so we have considered all the requirements for starting a money transfer agency . We also took it further by analyzing and drafting a sample money transfer agency marketing plan template backed up by actionable guerrilla marketing ideas for money transfer agencies. So let’s proceed to the business planning section.

Have you ever dreamt of becoming your own boss? Did you per chance study Banking and Finance, Accountancy or any related course and are finding it difficult to get your ideal job? You don’t need to worry because your dream of becoming your own boss and still work as a professional can be fulfilled.

One of the business opportunities that you can leverage on is to start a money transfer agency business. Although you would need ample experience with good track record to be able to attract well – paying clients, but that does not stop you from still making headway in this line of business.

The truth is that the business has pretty low entry capital and you can start the business from your home, shared offices space or from a kiosk with one or two staff members.

You can be sure that your services would always be in demand by people who want to send money to other parts of the world especially migrants who want to send money back home. If you are interested in starting a money transfer agency, then you should be ready to conduct thorough feasibility studies and market survey before committing your money and other resources to it.

Aside from a thorough and detailed feasibility studies and market survey, one of the important documents that will aid the success of the business is a good and workable business plan. Below is a sample money transfer business plan template that can help you to successfully write your own.

A Sample Mobile Money Transfer Agency Business Plan Template

1. industry overview.

The money transfer industry comprises of firms that act as third-party agents that facilitate money transfers and payments among parties in different locations. Please note that this industry does not include organizations that are involved in bank wire services and card-based services.

Research conducted by IBISWorld shows that the Money Transfer Agencies industry has recorded robust growth over the past five years.

This growth is largely due to the increasing globalization and rising mobility of labor. Industry revenue is closely linked to the number of overseas workers employed in the united states, with many sending money back to their respective countries to support their families.

The resilience of the US economy relative to other developed economies and its skill shortages make the US an attractive place for overseas workers to seek employment. As a result, industry revenue is expected to increase at an annualized 7.2 percent over the five years through 2017-18, to $299.9 million. Industry revenue is anticipated to grow by 3.7 percent.

The Money Transfer industry is indeed a thriving industry and pretty much active in all parts of the world and the industry is responsible for employing several people.

The Money Transfer industry is in the growth phase of its life cycle. Industry value added, which measures an industry’s contribution to the overall economy, is forecast to grow at an annualized 4.5 percent over the 10 years through 2022-23.

This represents an outperformance compared with real GDP, which is projected to grow at an annualized 2.5 percent over the same period. This outperformance is a key characteristic of an industry in the growth phase of its economic life cycle. Increasing labor mobility and globalization will underpin demand for money transfer services over the next five years.

Any aspiring entrepreneur or investor that is considering starting this type of business whether on a small scale or in a large scale should ensure that he or she conducts thorough market survey and feasibility studies so as to get it right.

The truth is that, this type of business does pretty well when it is strategically positioned. Places like campus, school board / districts, passport office, immigration centers, licensing offices and migrant communities are ideal for this type of business.

Over and above, the money transfer business is profitable and it is open for any aspiring entrepreneur to come into the industry; you can choose to start on a small scale in one or two public facilities and operate on a local and national level. If you have the capital and business exposure, then you can choose to start on a large scale with several outlets in key cities.

2. Executive Summary

Swiftness© Money Transfer Agency, Inc. is a registered and licensed international money transfer agency. We have been able to secure all the required documentation and a standard office facility that is highly suitable for the kind of business we are into.

Our head office is situated in Los Angeles – California and we hope to sometime in the nearest future have branches scattered all across major cities in the United States of America.

Swiftness© Money Transfer Agency, Inc. will be involved in all aspect of money transfer, we will act as third-party agents that facilitate money transfers and payments among parties in different locations. Our business goal is to become one of the leading money transfer agencies in Los Angeles – California and we will make sure that every service we handle compete favorably with the best in the industry in terms of time.

We are aware that there are several money transfer agencies all around Los Angeles – California which is why we spent time and resources to conduct a thorough feasibility studies and market survey so as to position our business in strategic locations in Los Angeles – California.

Much more than prompt money transfer, our customer care is going to be second to none in the whole of Los Angeles – California. We know that our customers are the reason why we are in business which is why we will go the extra mile to get them satisfied when they patronize our services.

At Swiftness© Money Transfer Agency, Inc. our client’s best interest come first, and everything we do will be guided by our values and professional ethics. We will ensure that we hold ourselves accountable to the highest standards by delivering excellent jobs and also meeting our client’s needs precisely and completely.

Swiftness© Money Transfer Agency, Inc. is a family business that is owned and managed by Jude Adamson and his immediate family members.

Jude Adamson is a graduate of Business Administration and has extensive experience working with one of the leading global money transfer agencies in the United States of America. He will bring his experience and expertise to help grow Swiftness© Money Transfer Agency, Inc.

3. Our Products and Services

Swiftness© Money Transfer Agency, Inc. is in the industry for the purpose of making profits and we will ensure we position our business to favorably compete for the available market in the industry. We are going to do all that is permitted by the laws in the United States of America to achieve our business goals.

Here are some of our service offerings;

• In-store money transfers operations
• Retail money transfer
• Online money transfer

4. Our Mission and Vision Statement

• Our vision is to build a money transfer agency that will have active presence all over the United States of America and the globe.
• Our mission is to establish a standard money transfer agency that will make available a wide range of services in the money transfer industry at affordable prices to residents of Los Angeles – California, and other locations in the United States of America where we intend operating from.

Our Business Structure

Our intention of starting a money transfer agency is to build a standard business with active presence in major cities in the United States of America and the globe. We will ensure that we put the right structures in place that will support the kind of growth that we have in mind while setting up the business.

In putting in place a good business structure, we will ensure that we hire only people that are qualified, honest, customer centric and are ready to work to help us build a prosperous business that will benefit all the stake holders.

As a matter of fact, profit-sharing arrangement will be made available to all our management staff and it will be based on their performance for a period of ten years or more. In view of that, we have decided to hire qualified and competent hands to occupy the following positions;

• Chief Executive Officer (Owner)
• Admin and Human Resources Manager

Sales and Marketing Manager

Money Transfer Agents

• Client Services Executive

5. Job Roles and Responsibilities

Chief Executive Officer – CEO:

• Intensifies management’s effectiveness by recruiting, selecting, orienting, training, coaching, counseling, and disciplining managers; communicating values, strategies, and objectives; assigning accountabilities; planning, monitoring, appraising job results and developing incentives
• Creates, communicates, and implements the organization’s vision, mission, and overall direction – i.e. leading the development and implementation of the overall organization’s strategy.
• Accountable for fixing prices and signing business deals
• Responsible for providing direction for the business
• Responsible for signing checks and documents on behalf of the company
• Evaluates the success of the organization
• Reports to the board

Admin and HR Manager

• Responsible for overseeing the smooth running of HR and administrative tasks for the organization
• Maintains office supplies by checking stocks; placing and expediting orders; evaluating new products.
• Ensures operation of equipment by completing preventive maintenance requirements; calling for repairs.
• Defines job positions for recruitment and managing interviewing process
• Carries out induction for new team members
• Responsible for training, evaluation and assessment of employees
• Responsible for arranging travel, meetings and appointments
• Oversees the smooth running of the daily office activities.
• Manages external research and coordinates all the internal sources of information to retain the organizations’ best customers and attract new ones
• Models demographic information and analyze the volumes of transactional data generated by customer purchases
• Identifies, prioritizes, and reaches out to new partners, and business opportunities et al
• Identifies development opportunities; follows up on development leads and contacts; participates in the structuring and financing of the business
• Documents all customer contact and information
• Represents the company in strategic meetings
• Helps to increase sales and growth for the company
• Handle in-store money transfer operations
• Handle retail money transfer
• Handle online money transfer
• Responsible for operating IT systems for the organization
• In charge of planning for and negotiating technical difficulties
• Responsible for monitoring exchange rates
• In charge of negotiating service charges.
• Responsible for dealing with the effects of network congestion.
• Responsible for preparing financial reports, budgets, and financial statements for the organization
• Provides managements with financial analyses, development budgets, and accounting reports
• Responsible for financial forecasting and risks analysis.
• Performs cash management, general ledger accounting, and financial reporting
• Responsible for developing and managing financial systems and policies
• Responsible for administering payrolls
• Ensures compliance with taxation legislation
• Handles all financial transactions for the organization
• Serves as internal auditor for the organization

Client Service Executive

• Ensures that all contacts with clients (e-mail, walk-In center, SMS or phone) provides the client with a personalized customer service experience of the highest level
• Assist in helping clients track their transfer and provide helpful information as required
• Through interaction with clients on the phone, uses every opportunity to build client’s interest in the company’s products and services
• Manages administrative duties assigned by the human resources and admin manager in an effective and timely manner
• Consistently stays abreast of any new information on the organizations’ products, promotional campaigns etc. to ensure accurate and helpful information are supplied to clients when they make enquiries.

6. SWOT Analysis

Our intention of starting our money transfer business in Los Angeles – California is to test run the business for a period of 3 to 6 months to know if we will invest more money, expand the business and then open transfer centers all around key cities in the United States.

We are quite aware that there are several money transfer agencies in the United States and even in the same locations where we intend locating ours, which is why we are following the due process of establishing a business.

We know that if a proper SWOT analysis is conducted for our business, we will be able to position our business to maximize our strength, leverage on the opportunities that will be available to us, mitigate our risks and be equipped to confront our threats.

Swiftness© Money Transfer Agency, Inc. employed the services of an expert HR and Business Analyst with bias in startups to help us conduct a thorough SWOT analysis and to help us create a Business model that will help us achieve our business goals and objectives. This is the summary of the SWOT analysis that was conducted for Swiftness© Money Transfer Agency, Inc.;

The strategic locations we intend positioning our business, the business model we will be operating on, ease of transfer, wide range of services and our excellent customer service culture will definitely count as a strong strength for Swiftness© Money Transfer Agency, Inc.

So also we have a team that can go all the way to give our clients value for their money; a team that are trained and equipped to pay attention to details and swiftly and safely transfer money both locally, nationally and internationally.

A major weakness that may count against us is the fact that we are a new money transfer agency and we don’t have the financial capacity to compete with multi – million dollar money transfer agencies in this industry.

• Opportunities:

Rising globalization and labor mobility continues to benefit the industry’s revenue performance and online operators have benefited from their lower cost base and the rise of online transfers. The fact that people and businesses are always sending money from one location to another provides us with unlimited opportunities.

We have been able to conduct thorough feasibility studies and market survey and we know what our potential clients will be looking for when they patronize our services; we are well positioned to take on the opportunities that will come our way.

Just like any other business, one of the major threats that we are likely going to face is economic downturn. It is a fact that economic downturn affects purchasing / spending power; in essence, if the economy is under stress, people will find it difficult to transfer money.

Another threat that may likely confront us is the arrival of a new money transfer agency in same location where ours is located. unfavorable government policies and technology can also pose a threat to businesses such as ours.

7. MARKET ANALYSIS

• Market Trends

Rising globalization and labor mobility continues to benefit industry’s revenue performance and online operators have benefited from their lower cost base and the rise of online transfers.

Although the fact that the industry is divided in the two categories makes it easier for aspiring entrepreneurs to choose to start on a small scale by servicing local communities and small to medium scale businesses or to start big by offering all the services.

A common trend in this industry is that money transfer agencies usually position their offices close to colleges and migrant communities. This is so because statistics shows that international students and of course working class migrants/expatriates are known to be top on the list when it comes to transferring monies from the United States to other countries of the world.

8. Our Target Market

The target market for those who need the services of money transfer businesses are all encompassing. In view of that, we have positioned our transfer centers in strategic locations to service residents and businesses in Los Angeles – California and other towns in key cities in the United States of America. We are in the money transfer industry to attract the following clients;

• Expatriates
• Business men and women
• Small scale businesses
• Clearing and forwarding agents
• Corporate Executives

Our competitive advantage

The competitions that exist in the industry is stiff because anyone that has the finance and business expertise can decide to start this type of business howbeit on a small scale servicing a city or more. Although, the money transfer industry requires some form of trainings and expertise, but that does not in any way stop any serious minded entrepreneur from starting the business and still make good profit out of it.

The business model we will be operating on, having a good reputation, proximity to key markets, unlimited access to the latest available and most efficient technology and techniques, ease of money transfer, wide range of services and our excellent customer service culture will definitely count as a competitive advantage for Swiftness© Money Transfer Agency, Inc.

So also, we have a team that can go give our clients value for their money; a team that is trained and equipped to pay attention to details and deliver parcels on time both locally, nationally and internationally.

Lastly, our employees will be well taken care of, and their welfare package will be among the best within our category in the industry meaning that they will be more than willing to build the business with us and help deliver our set goals and achieve all our aims and objectives.

9. SALES AND MARKETING STRATEGY

• Sources of Income

Swiftness© Money Transfer Agency, Inc. is established with the aim of maximizing profits in the money transfer industry and we are going to ensure that we do all it takes to offer our services and products to a wide range of customers. Swiftness© Money Transfer Agency, Inc. will generate income by offering the following services;

10. Sales Forecast

One thing is certain; there would always be individuals, businesses or corporate organizations in Los Angeles – California and in the United States of America who would always need the services of money transfer agencies.

We are well positioned to take on the available market in Los Angeles – California and we are quite optimistic that we will meet our set target of generating enough income from the first six months of operation and grow the business and our clientele base.

We have been able to examine the money transfer agencies industry, we have analyzed our chances in the industry and we have been able to come up with the following sales forecast. Below are the sales projections for Swiftness© Money Transfer Agency, Inc., it is based on the location of our business and the wide range of services that we will be offering;

• First Fiscal Year: $240,000
• Second Fiscal Year: $450,000
• Third Fiscal Year: $750,000

N.B : This projection was done based on what is obtainable in the industry and with the assumption that there won’t be any major economic meltdown and natural disasters within the period stated above. There won’t be any major competitor offering same services as we do within same location. Please note that the above projection might be lower and at the same time it might be higher.

• Marketing Strategy and Sales Strategy

Before choosing a location for our business, we conducted a thorough market survey and feasibility studies in order for us to penetrate the available market and become the preferred choice for businesses and residents of Los Angeles – California.

We have detailed information and data that we were able to utilize to structure our business to attract the number of customers we want to attract per time.

We hired experts who have good understanding of the money transfer agency industry to help us develop marketing strategies that will help us achieve our business goal of winning a larger percentage of the available market in Los Angeles – California.

In summary, Swiftness© Money Transfer Agency, Inc. will adopt the following sales and marketing approach to win customers over;

• Introduce our business by sending introductory letters alongside our brochure to corporate organizations, households and key stakeholders in Los Angeles and other cities in California.
• Print handbills about our business and its locations
• Advertise on the internet on blogs and forums, and also on social media like Twitter, Facebook, LinkedIn to get our message across.
• Create a basic website for our business so as to give our business an online presence (list the locations of our transfer centers)
• Directly market our business
• Join local business center associations for industry trends and tips
• Provide discount days for our customers
• Advertise our business in community based newspapers, local TV and radio stations
• List our business on yellow pages’ ads (local directories)
• Encourage the use of Word of mouth marketing (referrals)

11. Publicity and Advertising Strategy

Despite the fact that our office facility and transfer centers will be well located, we will still go ahead to intensify publicity for the business. We are going to explore all available means to promote our business.

Swiftness© Money Transfer Agency, Inc. has a long term plan of opening our transfer centers in various locations in key cities all around the United States of America which is why we will deliberately build our brand to be well accepted in Los Angeles – California before venturing out.

As a matter of fact, our publicity and advertising strategy is not solely for winning customers over but to effectively communicate our brand. Here are the platforms we intend leveraging on to promote and advertise Swiftness© Money Transfer Agency, Inc.;

• Place adverts on both print (community based newspapers and magazines) and electronic media platforms
• Sponsor relevant community programs
• Leverage on the internet and social media platforms like; Instagram, Facebook, twitter, et al to promote our brand
• Install our billboards in strategic locations all around Los Angeles – California
• Distribute our fliers and handbills in target areas
• Position our Flexi Banners at strategic positions in the location where our money transfer centers are located.
• Ensure that all our workers wear our branded shirts and all our delivery vehicles are well branded with our company’s logo.

12. Our Pricing Strategy

At Swiftness© Money Transfer Agency, Inc. we will keep the prices of our money transfer service charges below the average market rate for all of our customers by keeping our overhead low and by collecting payment in advance from corporate organizations who would hire our services. In addition, we will also offer special discounted rates to all our customers at regular intervals.

• Payment Options

The payment policy adopted by Swiftness© Money Transfer Agency, Inc. is all inclusive because we are quite aware that different customers prefer different payment options as it suits them but at the same time, we will ensure that we abide by the financial rules and regulation of the United States of America.

Here are the payment options that Swiftness© Money Transfer Agency, Inc. will make available to her clients;

• Payment via bank transfer
• Payment with cash
• Payment via online bank transfer
• Payment via check
• Payment via Point of Sale Machines (POS Machine)
• Payment via bank draft
• Payment via mobile money

In view of the above, we have chosen banking platforms that will enable our clients make payment for our services without any stress on their part.

13. Startup Expenditure (Budget)

When it comes to starting a money transfer agency, the major areas that you should look towards spending the bulk of your cash is in the renting or leasing of well – located facilities. Aside from that, you are not expected to spend much except for paying of your employees and the purchase of supplies. These are the key areas where we will spend our startup capital;

• The total fee for registering the Business in the United States – $750.
• Legal expenses for obtaining licenses and permits as well as the accounting services (software, P.O.S machines and other software) – $1,300.
• Marketing promotion expenses for the grand opening of the business in the amount of $3,500 and as well as flyer printing (2,000 flyers at $0.04 per copy) for the total amount of $3,580.
• The cost for hiring Business Consultant – $2,500.
• The amount needed for the purchase of insurance policy cover (general liability, workers’ compensation and property casualty) coverage at a total premium – $2,400.
• The cost for payment of rent for 12 months at $1.76 per square feet in the total amount of $35,600.
• The cost for the facility and remodeling – $10,000.
• Other start-up expenses including stationery ( $500 ) and phone and utility deposits ( $2,500 ).
• Operational cost for the first 3 months (salaries of employees, payments of bills et al) – $100,000
• The cost for store equipment (cash register, security, ventilation, signage) – $13,750
• The cost of purchase and installation of CCTVs and car tracker devices – $10,000
• The cost for the purchase of furniture and gadgets for the office (computers, internet device, photocopy machine, computers, fax machine, phone box, printing machines, laminating machines and scanning machine, TVs, Sound System, tables and chairs et al) – $20,000
• The cost of launching a website – $600
• Miscellaneous – $10,000

We would need an estimate of $150,000 to successfully set up our money transfer agency in Los Angeles – California.

Generating Startup Capital for Swiftness© Money Transfer Agency, Inc.

No matter how fantastic your business idea might be, if you don’t have the required money to finance the business, the business might not become a reality. Finance is a very important factor when it comes to starting a money transfer agency.

Swiftness© Money Transfer Agency, Inc. is a family business that is solely owned and financed by Jude Adamson and his immediate family members. They do not intend to welcome any external business partners which is why he has decided to restrict the sourcing of the startup capital to 3 major sources.

• Generate part of the startup capital from personal savings
• Source for soft loans from family members and friends
• Apply for loan from the bank

N.B: We have been able to generate about $50,000 ( Personal savings $30,000 and soft loan from family members $20,000 ) and we are at the final stages of obtaining a loan facility of $100,000 from our bank. All the papers and documents have been signed and submitted, the loan has been approved and any moment from now our account will be credited with the amount.

14. Sustainability and Expansion Strategy

The future of a business lies in the number of loyal customers that they have, the capacity and competence of their employees, their investment strategy and the business structure. If all of these factors are missing from a business, then it won’t be too long before the business close shop.

One of our major goals of starting Swiftness© Money Transfer Agency, Inc. is to build a business that will survive off its own cash flow without injecting finance from external sources once the business is officially running.

We know that one of the ways of gaining approval and winning customers over is to offer our money transfer services a little bit cheaper than what is obtainable in the market and also to ensure timely and safe deliveries. We are well prepared to survive on lower profit margin for a while.

Swiftness© Money Transfer Agency, Inc. will make sure that the right foundation, structures and processes are put in place to ensure that our staff welfare are well taken of. Our company’s corporate culture is designed to drive our business to greater heights and training and retraining of our workforce is at the top burner.

As a matter of fact, profit-sharing arrangement will be made available to all our management staff and it will be based on their performance for a period of three years or more. We know that if that is put in place, we will be able to successfully hire and retain the best hands we can get in the industry; they will be more committed to help us build the business of our dreams.

Check List/Milestone

• Business Name Availability Check : Completed
• Business Registration: Completed
• Opening of Corporate Bank Accounts: Completed
• Securing standard photo booths: In Progress
• Opening Mobile Money Accounts: Completed
• Opening Online Payment Platforms: Completed
• Application and Obtaining Tax Payer’s ID: In Progress
• Application for business license and permit: Completed
• Purchase of Insurance for the Business: Completed
• Leasing of facility for positioning and remodeling the facility: In Progress
• Conducting Feasibility Studies: Completed
• Generating capital from family members: Completed
• Applications for Loan from the bank: In Progress
• Writing of Business Plan: Completed
• Drafting of Employee’s Handbook: Completed
• Drafting of Contract Documents and other relevant Legal Documents: In Progress
• Design of The Company’s Logo: Completed
• Printing of Promotional Materials: In Progress
• Recruitment of employees: In Progress
• Purchase of furniture, racks, shelves, computers, electronic appliances, office appliances and CCTV: In progress
• Creating Official Website for the Company: In Progress
• Creating Awareness for the business both online and around the community: In Progress
• Health and Safety and Fire Safety Arrangement (License): Secured
• Establishing business relationship with third party services providers – banks, technology companies and other financial institutions et al: In Progress

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Money Transfer Business Plan (PDF, Excel, Word)

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• Executive summary
• Company overview
• Products and services
• Operation plan
• Market and industry overview
• Sales & marketing plan
• Financial plan
• Risk management plan
• Potential funding sources

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Biden hikes tariffs on Chinese EVs, solar cells, steel, aluminum — and snipes at Trump

President Joe Biden slapped major new tariffs on Chinese electric vehicles, advanced batteries, steel, aluminum and other goods Tuesday as he embraced a strategy that’s increasing friction between the world’s two largest economies.

President Joe Biden sits down to sign a document in the Rose Garden of the White House in Washington, Tuesday, May 14, 2024, imposing major new tariffs on electric vehicles, semiconductors, solar equipment and medical supplies imported from China. (AP Photo/Susan Walsh)

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President Joe Biden speaks in the Rose Garden of the White House in Washington, Tuesday, May 14, 2024, announcing plans to impose major new tariffs on electric vehicles, semiconductors, solar equipment and medical supplies imported from China. (AP Photo/Susan Walsh)

FILE - A worker assembles an SUV at a car plant of Li Auto, a major Chinese EV maker, in Changzhou in eastern China’s Jiangsu province on March 27, 2024. The Biden administration is announcing plans to slap new tariffs on Chinese electric vehicles, advanced batteries, solar cells, steel, aluminum and medical equipment. (Chinatopix Via AP, File)

WASHINGTON (AP) — President Joe Biden slapped major new tariffs on Chinese electric vehicles, advanced batteries, solar cells, steel, aluminum and medical equipment on Tuesday, taking potshots at Donald Trump along the way as he embraced a strategy that’s increasing friction between the world’s two largest economies.

The Democratic president said that Chinese government subsidies ensure the nation’s companies don’t have to turn a profit, giving them an unfair advantage in global trade.

“American workers can outwork and outcompete anyone as long as the competition is fair,” Biden said in the White House Rose Garden. “But for too long, it hasn’t been fair. For years, the Chinese government has poured state money into Chinese companies ... it’s not competition, it’s cheating.”

The tariffs come in the middle of a heated campaign between Biden and Trump, his Republican predecessor, to show who’s tougher on China. In a nod to the presidential campaign, Biden recognized lawmakers from Michigan in his remarks and spoke about workers in Pennsylvania and Wisconsin, all battleground states in November’s election.

Asked to respond to Trump’s comments that China was eating America’s lunch, Biden said of his rival, “He’s been feeding them a long time.” The Democrat said Trump had failed to crack down on Chinese trade abuses as he had pledged he would do during his presidency.

Karoline Leavitt, the Trump campaign’s press secretary, called the new tariffs a “weak and futile attempt” to distract from Biden’s own support for EVs in the United States, which Trump says will lead to layoffs at auto factories.

The Chinese government was quick to push back against the tariffs, saying they “will seriously affect the atmosphere of bilateral cooperation.” The foreign ministry used the word “bullying.”

The tariffs are unlikely to have a broad inflationary impact in the short term because of how they’re structured, some not to take effect until 2026, but there could be price increases in the meantime for EV batteries, solar and some other specific items.

Biden administration officials said they think the tariffs won’t escalate tensions with China, yet they expect China will explore ways to respond to the new taxes on its products. It’s uncertain what the long-term impact on prices could be if the tariffs contribute to a wider trade dispute.

The tariffs are to be phased in over the next three years, with those that take effect in 2024 covering EVs, solar cells, syringes, needles, steel and aluminum and more. There are currently very few EVs from China in the U.S., but officials worry low-priced models made possible by Chinese government subsidies could soon start flooding the U.S. market.

Chinese firms can sell EVs for as little as $12,000 . China’s solar cell plants and steel and aluminum mills have enough capacity to meet much of the world’s demand, with Chinese officials arguing their production keeps prices low and would aid a transition to the green economy.

China’s commerce ministry said in a statement that the tariffs were “typical political manipulation” as it expressed its “strong dissatisfaction” and pledged to “take resolute measures to defend its rights and interests.”

Under the findings of a four-year review on trade with China, the tax rate on imported Chinese EVs will rise to 102.5% this year, up from total levels of 27.5%. The review was undertaken under Section 301 of the Trade Act of 1974, which allows the government to retaliate against trade practices deemed unfair or in violation of global standards.

Under the 301 guidelines, the tariff rate is to double to 50% on solar cell imports this year. Tariffs on certain Chinese steel and aluminum products will climb to 25% this year. Computer chip tariffs will double to 50% by 2025.

For lithium-ion EV batteries, tariffs will rise from 7.5% to 25% this year. But for non-EV batteries of the same type, the tariff increase will be implemented in 2026. There are also higher tariffs on ship-to-shore cranes, critical minerals and medical products.

The new tariffs, at least initially, are largely symbolic since they will apply to only about $18 billion in imports. A new analysis by Oxford Economics estimates the tariffs will have a barely noticeable impact on inflation by pushing up inflation by just 0.01%.

The Chinese EV maker BYD has explored the possibility of opening factories in Mexico for the Mexican market, possibly creating a way to ship goods into the United States. U.S. Trade Representative Katherine Tai said she was talking with industry and workers about the possibility and to “stay tuned.”

The auto industry is still trying to assess the impact of the tariffs. But at present, it appears they could be assessed on only two Chinese-made vehicles, the Polestar 2 luxury EV and potentially Volvo’s S90 luxury gas-electric hybrid midsize sedan.

“We’re still reviewing the tariffs to understand exactly what’s affected and how,” said Russell Datz, spokesman for Volvo, a Swedish brand now under China’s Geely group. A message was left seeking comment from Polestar, which also falls under Geely.

The Chinese foreign ministry spokesperson, Wang Wenbin, said the U.S. is trampling on the principles of a market economy and international economic and trade rules.

“It’s a naked act of bullying,” Wang said.

The Chinese economy has been slowed by the collapse of the country’s real estate market and past coronavirus pandemic lockdowns, prompting Chinese President Xi Jinping to try to jumpstart growth by ramping up production of EVs and other products, making more than the Chinese market can absorb.

This strategy further exacerbates tensions with a U.S. government that claims it’s determined to strengthen its own manufacturing to compete with China, yet avoid a larger conflict.

“China’s factory-led recovery and weak consumption growth, which are translating into excess capacity and an aggressive search for foreign markets, in tandem with the looming U.S. election season add up to a perfect recipe for escalating U.S. trade fractions with China,’’ said Eswar Prasad, professor of trade policy at Cornell University.

The Europeans are worried, too. The EU launched an investigation last fall into Chinese subsidies and could impose an import tax on Chinese EVs.

After Xi’s visit to France last week, European Commission President Ursula von der Leyen warned that government-subsidized Chinese EVs and steel “are flooding the European market” and said, “The world cannot absorb China’s surplus production.’’

Biden’s administration views China, with its subsidies of manufacturing, as trying to globally control the EV and clean-energy sectors, whereas the administration says its own industrial support is geared toward ensuring domestic supplies to help meet U.S. demand.

“We do not seek to have global domination of manufacturing in these sectors, but we believe because these are strategic industries and for the sake of resilience of our supply chains, that we want to make sure that we have healthy and active firms,” Treasury Secretary Janet Yellen said.

The tensions go far beyond a trade dispute to deeper questions about who leads the world economy as a seemingly indispensable nation. China’s policies could make the world more dependent on its factories, possibly giving it greater leverage in geopolitics. At the same time, the United States says it’s seeking for countries to operate by the same standards so competition can be fair.

China maintains the tariffs are in violation of the global trade rules the United States originally helped establish through the World Trade Organization. It accuses the U.S. of continuing to politicize trade issues and on Friday said the new tariffs compound the problems caused by tariffs the Trump administration previously put on Chinese goods, which Biden has kept.

Those issues are at the heart of November’s presidential election, with a bitterly divided electorate seemingly united by the idea of getting tough with China. Biden and Trump have overlapping but different strategies.

Biden sees targeted tariffs as needed to defend key industries and workers, while Trump has threatened broad 10% tariffs against all imports from rivals and allies alike.

Biden has staked his presidential legacy on the U.S. pulling ahead of China with its own government investments in factories to make EVs, computer chips and other advanced technologies.

Trump tells his supporters America is falling further behind China by not betting on oil to keep powering the economy, despite its climate change risks. The ex-president may believe tariffs can change Chinese behavior, but he believes the U.S. will be reliant on China for EV components and solar cells.

“Joe Biden’s economic plan is to make China rich and America poor,” he said at a rally this month in Wisconsin.

AP autos writer Tom Krisher contributed to this report from Detroit.