Biden intensifies Tariff Offensive against Chinese EVs, other key goods

Biden intensifies Tariff Offensive against Chinese EVs, other key goods


Biden intensifies Tariff Offensive against Chinese EVs, other key goods

U.S. President Joe Biden delivers remarks at the White House in Washington on May 13, 2024.

U.S. President Joe Biden on Tuesday announced plans to quadruple punitive duties on Chinese electric vehicles to 100 percent in 2024 and sharply raise tariffs on Chinese goods in other sectors of strategic importance, such as solar equipment and semiconductors, in a bid to help American workers compete.

Biden said in his speech at the White House that the increased levies, which will apply to about $18 billion worth of imports from China, are aimed at preventing the Asian economic powerhouse from threatening U.S. manufacturing jobs and undercutting American industries.

With the U.S. presidential election approaching in November, Biden has been seeking to convince swing voters that he has outperformed his predecessor Donald Trump on the economy, delivering a better job market and promising stronger protections for American workers if they give the incumbent a second term.

“American workers can outwork and outcompete anyone, as long as the competition is fair,” Biden said. “But for too long, it hasn’t been fair. For years, the Chinese government has poured state money to Chinese companies across a whole range of industries.”

China’s flooding of global markets creates “unfairly low prices, driving other manufacturers around the world out of business,” he said, calling the practice “cheating” rather than competition.

China quickly reacted to the new actions, saying they run counter to the spirit of a number of agreements reached between Chinese President Xi Jinping and Biden.

Unlike in Europe, where many Chinese EVs are sold, the U.S. market is largely shielded from them due to the 27.5 percent tariff on Chinese-made cars that has been in place since Trump’s presidency.

“I’m determined that the future of electric vehicles will be made in America, by union workers, period,” Biden said. In addition to considerably hiking the EV tariff rate, he said import duties for other key sectors will be increased along with boosting investment.

“It’s a smart approach,” he said, seeking to contrast his economic policies with those of the Trump administration, which he claimed had failed either to boost exports or strengthen U.S. manufacturing as promised.

The White House said the tariff rate on solar cells from China will double to 50 percent in 2024, while the rate for semiconductors will double to 50 percent by 2025.

It said the tariff rate on lithium-ion EV batteries will increase from 7.5 percent to 25 percent this year, while for non-EV batteries of the type the rate will mark the same increase in 2026.

Meanwhile, tariffs on certain steel and aluminium imports from China will more than triple to 25 percent in 2024.

Lael Brainard, Biden’s top economic adviser, told reporters, “China is using the same playbook it has before to power its own growth at the expense of others by continuing to invest despite excess Chinese capacity and flooding global markets with exports that are under-priced due to unfair practices.”

“China is simply too big to play by its own rules,” she said.

Besides urging the Biden administration to immediately scrap the additional levies that will “seriously affect the atmosphere of bilateral cooperation,” the Chinese Commerce Ministry signalled retaliation in a statement, saying “resolute measures” will be taken to defend the country’s rights and interests.

All the tariffs fall under Section 301 of the country’s 1974 trade law, which authorizes the use of levies against a foreign country’s allegedly unfair practices.

The section was a favourite tool of Trump in justifying the imposition of higher duties on Chinese imports when he started a trade war with Beijing in 2018.

Earlier this year, Trump, the presumptive Republican presidential nominee, floated tariffs as high as 60 percent on all Chinese imports if elected and 10 percent duties on those from the rest of the world.

On Tuesday, Trump told reporters in New York that “China’s eating our lunch right now,” saying the Biden administration should have moved faster and expanded such measures to other types of products as well.

The announcement made by the Biden administration covered many other tariff increases on Chinese imports, such as those on ship-to-shore cranes and medical products, but senior officials stressed they were carefully targeted at strategic sectors, unlike the broad-based actions taken by Trump.

They said the targeted sectors are those in which the United States is now making massive investments and Biden’s approach would not raise costs or threaten jobs.

The tariff rate on ship-to-shore cranes, regarded by the administration as vital pieces of infrastructure for the smooth flow of critical goods to and from the United States, will increase from zero to 25 percent in 2024.

Of the medical products, tariffs on syringes and needles will increase from zero to 50 percent in 2024 and those on rubber medical and surgical gloves will increase from 7.5 percent to 25 percent in 2026.