US President Joe Biden meets with Chinese President Xi Jinping on the sidelines of the G20 Leaders’ Summit in Bali, Indonesia, on November 14, 2022.
Kevin Lamarque | Reuters
The Biden administration on Tuesday announced tough new tariffs on $18 billion worth of Chinese imports. The White House said the higher tariffs were necessary to protect U.S. industry from unfair competition.
Starting this year, President Joe Biden will quadruple tariffs on imported electric vehicles from China, raising them from 25% to 100%. Import taxes on Chinese solar cells will double from 25% to 50%. China’s import tariffs on some steel and aluminum will more than triple, from the current 7.5% to 25%.
The president also directed U.S. Trade Representative Katherine Tai to more than triple tariffs on lithium-ion batteries for electric vehicles and other uses. Starting in 2025, tariffs on imported Chinese semiconductors will jump from 25% to 50%.
The White House said in a fact sheet that it would impose tariffs for the first time on Chinese imports of medical needles and syringes, as well as large ship-to-shore cranes. Chinese rubber medical gloves will also be hit by higher tariffs, as well as some respirators and masks.
Some products, such as batteries and natural graphite, will have longer phasing-in periods for tariffs. degree.
“The pace and trajectory of China’s production far exceeds any reasonable estimate of global demand,” a senior administration official said on a conference call with reporters on Monday.
“This will flood global markets with supply, undermine our ability to build production capacity at home and … make all of us around the world more vulnerable to economic coercion,” the official said.
warning sign
In recent weeks, officials from multiple White House agencies have expressed concern about China’s domestic subsidies for clean energy manufacturing.
They argue that Beijing’s subsidies are helping companies overproduce cheap clean energy products such as solar panels and electric vehicles that exceed domestic demand.
U.S. officials have warned that if companies can’t sell excess products at home, they could end up dumping them on global markets, making it difficult for other countries’ nascent clean energy industries to complete.
“China’s overcapacity is distorting global prices and production patterns, hurting U.S. businesses and workers, and hurting businesses and workers around the world,” U.S. Treasury Secretary Janet Yellen said before visiting China in March. , and confronted government officials over the issue.
Xinhua News AgencyThe Chinese government news agency called Yellen’s statement “baseless” and “reflects the zero-sum thinking of some policymakers in Washington.”
political risk
The new trade restrictions come during the White House’s official “Infrastructure Week,” as Cabinet officials travel across the country to promote Biden’s massive trade plan. Infrastructure and clean energy investments.
However, many of these investments are still in the early stages of implementation. The tariffs announced Tuesday are intended to help prevent an influx of cheap Chinese goods from hampering U.S. progress in clean energy.
U.S. Trade Representative Katherine Tai speaks to the media at the Indo-Pacific Economic Framework meeting in Detroit, Michigan, on May 27, 2023.
Rebecca Cook | Reuters
“China has been investing in its domestic electric vehicle industry and has engaged in a series of unfair practices that have given them significant starting, pricing and competitive advantages,” a government official said.
“Given the rapid growth of their exports and the overcapacity in the industry, it’s important that we make sure we have the right safeguards in place,” the official added.
There may be other factors at play besides simple protectionism. Biden’s future success with public investments in green energy, semiconductors and traditional infrastructure is a major part of his re-election argument in November.
Both Biden and Republican candidate Trump have adopted tough foreign policy platforms toward China. Everyone has a record in the Oval Office to back it up.
“No inflationary impact”
While higher China tariffs could help Biden maintain his hawkish stance, analysts warn that new import taxes could have unintended consequences for the domestic economy and individual consumers.
For example, Goldman Sachs previously predicted that for every percentage point increase in effective tariffs, gross domestic product (GDP) would fall by 0.03%, consumer prices would rise by 0.1%, and inflation would persist for a year.
The Biden administration has so far insisted the tariffs “will not have an inflationary impact” because they are not “across the board” across the economy and only target specific industries, a senior administration official said on a conference call Monday.
This is in stark contrast to Trump’s campaign proposal, which called for indiscriminate A 10% tariff is imposed on all imported products.
U.S. President Trump and Chinese President Xi Jinping at the G20 Leaders’ Summit in Japan on June 29, 2019.
Kevin Lamarque | Reuters
The senior official added on Monday that consumers can expect “no additional costs” from Biden’s new tariffs.
“What Americans can expect is that ongoing investments will continue to drive record employment levels in manufacturing and factory construction,” the official said. “These tariffs will protect and defend those gains.”
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