Biden imposes greater duties on Chinese solar panels and electric vehicles

Biden imposes greater duties on Chinese solar panels and electric vehicles

US President Joe Biden is raising taxes on steel, solar panels, electric vehicles, and other products manufactured in China.

According to the White House, the actions were taken in reaction to unfair practices and were meant to save US employment. These actions include a 100% border tax on Chinese electric automobiles.

China has already voiced criticism of the pre-announced intentions.

According to analysts, the tariffs were mostly symbolic and meant to boost support during a difficult election year.

They come after months of criticism from former US President Donald Trump, who is challenging Biden in the presidential race and has maintained that his opponent's support for electric vehicles will "kill" the US auto sector.

The White House said that the tariffs imposed on Tuesday will affect goods valued at around $18 billion.

Tariffs on electric vehicles would increase from 25% to 100%, while taxes on solar cells would increase from 25% to 50%.

Tariff rates on certain items made of steel and aluminum will increase from 7.5% or less to more than quadruple to 25%.

US claims that declining trade with China may be advantageous.

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The US placed broad tariffs on Chinese imports under President Trump, claiming unfair trade practices. These steps extend on those duties.

Nearly 1,500 comments were sent to the government by company owners during the Biden administration's examination of the policies. These owners mostly argued that the restrictions were raising costs for regular Americans and requested that they be eliminated.

Both US political parties, who had long defended the advantages of international trade, have dramatically changed their views on trade, as evidenced by Mr. Biden's decision to maintain the tariffs and extend them into new areas despite the country's ongoing inflation.

Wendy Cutler, a vice-president of the Asia Society Policy Institute and a former US trade official, said she thought Americans were prepared to pay more for automobiles as long as they helped to preserve US employment and businesses.

"We've seen this movie before - with solar, with steel and [aluminium], as well as it comes to cars and other businesses the United States need to get ahead of the curve," she said.

"It all comes down to trade-offs. While cars may get more expensive in the short term, we want to have a competitive industry here in the long run."

White House officials refuted claims that the decision was influenced by domestic politics during a meeting with reporters.

They said that Beijing's damaging economic tactics, such as pressuring American firms to give information and then stealing it, were the reason for the US sanctions.

In contrast to Mr. Trump's strategy, they said the actions were targeted and that they did not anticipate them to increase inflation.

Having referred to himself as a "tariff man" in the past, the former president ran on a platform of proposing an all-encompassing 10% duty on imports from outside, with a 60% increase for items originating from China.

Additionally, he has criticized Mr. Biden for advocating for electric cars, claiming that this would kill US automakers and major employment in places like Michigan that will be crucial battlegrounds for the November election.

Since the US already levies high taxes on Chinese-made electric automobiles, sales of these vehicles are almost nonexistent.

However, Washington has been keeping a close eye on the rise in sales of Chinese businesses in Europe and other regions.

According to White House officials, the long-term effectiveness and sustainability of the transition depended on preventing a single nation from controlling the majority of green technology.

According to Natasha Ebtehadj of Artemis Investment Management, the corporate community is waiting to see whether Europe will follow suit, even if actions aimed at electric cars are probably not going to have much of an impact in the real world.

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New tariffs: semiconductors (from 25% to 50% by 2025); some steel and aluminum products (from 7.5% to 25% in 2024); electric vehicles (from 25% to 100% in 2024); lithium batteries and critical minerals (from 7.5% to 25% in 2024); solar cells (from 25% to 50% in 2024); ship to shore cranes (from 0% to 25% in 2024); rubber medical and surgical gloves (from 7.5% to 25% in 2026).

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Even though doing so might hinder the adoption of electric cars, other countries such as the UK and the European Union are discussing measures to restrict imports of these vehicles manufactured in China.

"It's not really a surprise to investors or to Chinese companies, particularly those in the run-up to an election where both of the candidates are not really pro-China," she said.

"Given the relatively small quantity of imports to the US, it's maybe more interesting to learn what happens next in Europe."

Since 2018, when Mr. Trump put tariffs on over two thirds of China's imports, valued at an estimated $360 billion at the time, the US and China have been embroiled in a trade war.

Beijing retaliated against the measures, sparking a standoff that culminated in a détente in early 2020 when Mr. Trump lowered the rate of some tariffs and China promised to increase its imports from the US.

Despite the fact that the US government has not received the $200 billion in additional border taxes that the tariffs were expected to bring about, they have still caused a significant disruption in the patterns of international commerce.

The average American has footed a large portion of the bill in the form of increased furniture, shoe, and other item costs.

Nonetheless, Oxford Economics called the most recent initiatives "more symbolic bark than bite" in a research report.

The company estimated that they would only slightly increase inflation by 0.01 percentage points while having a comparable negative impact on growth, referring to this as a "rounding error".