The Biden government on Tuesday announced the imposition of high tariffs on the import of several Chinese products
This is the latest battle in the trade war between the United States and China in recent years.
US President Joe Biden’s government announced Tuesday a substantial increase in tariffs on electric cars, solar panels, steel and other Chinese-made products.
The White House has said the measures, which include a 100% tax on electric cars from China, are a response to unfair trade policies and aim to protect American jobs.
China has already criticized the plans announced in advance.
Analysts said the tariffs were largely symbolic and aimed to help re-election in a difficult election year.
The measures were preceded by months of harsh criticism from former President Donald Trump, Biden’s virtual competitor in the race for the White House, who said that his rival’s support for electric cars would “kill” the auto industry American.
The tariffs announced Tuesday will affect imports worth an estimated $18 billion, according to the White House.
In addition to a 25% to 100% increase in import taxes on electric vehicles, tariffs on solar panels will increase by 25% to 50%.
Tariffs on some steel and aluminum products will triple to 25%, up from the current 7.5% or less.
“Unfair trade”
The measures announced by the White House are in addition to tariffs the United States had imposed on Chinese products during the Trump administration, citing unfair trade practices.
During the Biden administration’s review of the measures, the administration received nearly 1,500 comments, the vast majority from business owners who argued that the tariffs were raising prices for everyday Americans and called for their elimination.
Biden’s decision to keep tariffs in place and expand them into new areas — even as persistent U.S. inflation has affected his approval rating — is an indication of the dramatic shift in the trade positions of both Democrats and Republicans in the United States United States, which has long supported the benefits of global trade.
Wendy Cutler, a former U.S. trade official and now vice president of the Asia Society Policy Institute, said she believes Americans are willing to accept higher-priced cars in exchange for help protecting American businesses and jobs.
“We’ve seen this movie before: with solar energy, with steel and… [alumínio]”And when it comes to cars and other products, the United States has to outdo itself,” he said. “It’s about making concessions and maybe in the short term cars will become more expensive, but in the long term we want to have a competitive industry here,” she stressed.
In a meeting with reporters, White House officials denied that domestic US politics influenced the decision.
They said the measures are a response to Beijing’s trade practices that harm the United States, for example by forcing Western companies operating in China to share information and then appropriate that knowledge.
They also said the measures targeted specific targets and did not anticipate rising inflation, in contrast to their approach to Trump’s.
The former president, who at one point called himself a “tariff man,” campaigned on a proposal for an across-the-board 10% increase in tariffs on imports, which would rise to 60% for products from China.
He also attacked Biden for promoting electric vehicles, a move he says will destroy American auto companies, key employers in states like Michigan that will be major battlegrounds in November’s election.
A look at the new rates:
- Semiconductors: 25% to 50% by 2025
- Some steel and aluminum products: 7.5% to 25% by 2024
- Electric vehicles: 25% to 100% by 2024
- Lithium batteries and critical minerals: 7.5% to 25% by 2024
- Solar panels: 25% to 50% by 2024
- Ship-to-shore cranes: from 0% to 25% by 2024
- Rubber medical-surgical gloves: 7.5% to 25% by 2026
Waiting for Europe
The United States is already imposing high tariffs on Chinese-made electric vehicles, which has led to negligible sales of these cars.
However, Washington is cautiously watching the increase in sales of Chinese companies in Europe and other countries.
White House officials have said that ensuring green technologies are not dominated by a single country is critical to a successful and sustainable long-term energy transition.
While measures targeting electric vehicles will likely have minimal practical effect, the business world is waiting to see whether Europe will adopt similar measures, said Natasha Ebtehadj of Artemis Investment Management.
The European Union and the United Kingdom are discussing measures to curb imports of electric cars made in China, although this could slow their adoption.
“It’s not really a surprise to Chinese investors or companies, especially in the run-up to an election where both candidates are not truly pro-China,” Ebtehadj said.
“Given the relatively small volume of imports into the United States, it might be more interesting to see what happens next in Europe,” he added.
The United States and China have been engaged in a trade war since 2018, when Trump imposed tariffs on about two-thirds of goods imported from China, worth an estimated $360 billion at the time.
Those measures prompted retaliation from Beijing, a conflict that ended in relief in early 2020, when Trump cut some tax rates as China pledged to increase its purchases from the United States.
However, these promises were not enough, and the tariffs have since resulted in more than $200 billion in new border taxes for the US government, as well as caused a significant reorganization of global trade patterns.
Much of this was borne by ordinary Americans in the form of higher prices for furniture, shoes, and other goods.
However, Oxford Economics described the latest measures as “more of a symbolic snarl than a bite”. The company said it would likely raise inflation by just 0.01 percentage point, similarly affecting growth.
Source: Terra
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