President Joe Biden has announced steep increases in tariffs on Chinese-made electric cars, solar panels, and other goods. The White House stated that these measures, which include a 100% border tax on electric vehicles from China, are a response to unfair trade practices and are intended to protect American jobs.
The new tariffs, announced on Tuesday, are expected to impact approximately $18 billion worth of imports. The tariffs on electric vehicles will rise from 25% to 100%, while levies on solar cells will increase from 25% to 50%. Tariff rates on certain steel and aluminum products will more than triple, increasing from 7.5% or less to 25%.
President Biden emphasized that the tariffs are essential to ensuring that China does not unfairly dominate the market for critical goods, including electric vehicles, batteries, computer chips, and basic medical supplies. “If the pandemic taught us anything, it’s that we need to have a secure supply of essentials here at home,” he said.
China’s commerce ministry quickly responded, stating that the new tariffs would “severely affect the atmosphere for bilateral cooperation” and accused the U.S. of politicizing economic issues. The Chinese foreign ministry also indicated that it would take all necessary measures to safeguard its rights and interests.
The move comes amidst a challenging election year, with former President Donald Trump, who is running against Biden, criticizing the current administration’s support for electric cars, claiming it would harm the U.S. car industry. Trump has proposed a 10% tariff on all foreign imports, potentially rising to 60% for goods from China.
Wendy Cutler, a former U.S. trade official and now vice-president of the Asia Society Policy Institute, noted that Americans might be willing to accept higher car prices to protect U.S. industries and jobs. “It’s all about trade-offs,” she said. “In the immediate term, cars may become more expensive, but in the longer term, we want a competitive industry here.”
White House officials denied that the new tariffs were politically motivated, insisting that Beijing’s practices, such as forcing Western companies to share information and providing subsidies to Chinese firms, justified the measures. “They’re flooding the market,” Biden stated. “It’s not competing—it’s cheating.”
The tariffs build upon the border taxes imposed during the Trump administration, which cited unfair trade practices as justification. Despite receiving numerous comments from business owners urging the removal of tariffs due to increased costs, Biden has chosen to maintain and expand these measures.
The announcement also included increases in tariffs on semiconductors, lithium batteries, critical minerals, and ship-to-shore cranes, reflecting a broader strategy to protect U.S. industries. The tariffs on rubber medical and surgical gloves will rise from 7.5% to 25% by 2026.
The business community is now watching to see if Europe will follow the U.S. in imposing similar measures on Chinese-made electric cars, potentially affecting the global market. Natasha Ebtehadj of Artemis Investment Management suggested that the impact of these tariffs might be more significant in Europe than in the U.S., given the relatively small volume of Chinese imports to the American market.
Despite concerns about higher prices for consumers, the Biden administration remains focused on reducing dependence on China and fostering a robust domestic industry. As trade tensions continue, the effects of these tariffs on both economies and global trade patterns will be closely monitored.
For more information, you can read the full article on BBC News.