WASHINGTON (AP) — President Joe Biden imposed major new tariffs On Tuesday, he spoke about China’s electric vehicles, advanced batteries, solar cells, steel, aluminum and medical equipment, and criticized President Donald Trump’s strategy of increasing friction between the world’s two largest economies.
The Democratic president said that thanks to Chinese government subsidies, domestic companies don’t have to make a profit and are given an unfair advantage in global trade.
“American workers can work harder than anyone else and compete better than anyone else, as long as competition is fair,” Biden said in the White House Rose Garden. “But for too long, it hasn’t been fair. For years, the Chinese government has been funneling state funds to Chinese companies…It’s not competition, it’s cheating.”
Tariffs fall in the middle hot campaign while biden This is to show who is tougher on China than his Republican predecessor, Trump. Biden paid tribute to the president-elect, recognized the Michigan lawmaker in his remarks and spoke about workers in Pennsylvania and Wisconsin, battleground states for the November election.
Asked to respond to Trump’s comment that China is eating America’s lunch, Biden said of his rival: “He’s been feeding America for a long time.” Democrats said Trump has failed to crack down on China’s trade abuses, as he promised during his presidency.
Trump campaign spokeswoman Caroline Levitt said the new tariffs were a “weak and futile attempt” to distract from Biden’s own support for electric vehicles in the U.S., and that Trump said they would lead to layoffs at auto factories. claims.
The Chinese government quickly pushed back, saying the tariffs would “seriously affect the atmosphere of bilateral cooperation.” The Ministry of Foreign Affairs used the word “bullying.”
Due to their structure, tariffs are unlikely to have a significant impact on inflation. Biden administration officials said they don’t think the tariffs will escalate tensions with China, but they expect China to look for ways to respond to new taxes on its products. It is unclear what the long-term impact on prices would be if tariffs were to contribute to a broader trade dispute.
The tariffs will be phased in over the next three years, and will take effect in 2024, targeting products such as electric vehicles, solar cells, syringes, needles, steel and aluminum. There are currently few Chinese-made electric vehicles in the United States, but officials fear that lower-priced models made possible by Chinese government subsidies could soon start flooding the U.S. market.
Chinese companies can Sell your EV for just $12,000. China’s solar and steel and aluminum plants have enough capacity to meet much of the world’s demand, and Chinese officials say their production will help keep prices low and help transition to a green economy. claims to be helpful.
China’s Ministry of Commerce said in a statement that the tariffs were a “typical political maneuver,” expressing “strong dissatisfaction” and vowing to “take firm measures to protect our rights and interests.” said.
Based on the results of a four-year review of trade with China, the overall tax rate on EVs imported from China is scheduled to rise from 27.5% to 102.5% this year. The review was conducted under Section 301 of the Trade Act of 1974, which allows the government to retaliate against trade practices deemed unfair or in violation of global standards.
Based on the 301 guidelines, the import duty rate on solar cells will double to 50% this year. Tariffs on some Chinese steel and aluminum products will rise to 25% this year. Tariffs on computer chips will double to 50% by 2025.
Tariffs on lithium-ion batteries for EVs will be raised from 7.5% to 25% this year. However, for the same type of non-EV batteries, the tariff increase is scheduled to take effect in 2026. Tariffs will also increase on ship-to-shore cranes, critical minerals and medical products.
The new tariffs will be largely symbolic, at least initially, as they will only apply to about $18 billion of imports. New analysis from Oxford Economics estimates that tariffs would have little noticeable impact on inflation, pushing it up by just 0.01%.
Chinese EV maker BYD is considering the possibility of opening a factory in Mexico for the Mexican market, which could establish a way to transport goods to the United States. U.S. Trade Representative Katherine Tighe said she has been talking with industry and workers about the possibility and is “keeping an eye on it.”
The auto industry is still trying to assess the impact of the tariffs. But for now, it appears that only two Chinese-made vehicles are being evaluated: the Polestar 2 luxury electric vehicle and potentially Volvo’s S90 luxury gasoline-electric hybrid midsize sedan.
“We are still reviewing the tariffs to understand exactly what and how they will be affected,” said Russell Datz, a spokesman for Volvo, the Swedish brand now owned by China’s Geely Group. Stated. A message seeking comment was left with Polestar, which is also owned by Geely.
Chinese Foreign Ministry Spokesperson Wang Wenbin said the United States was trampling on market economy principles and international economic and trade rules.
“This is a blatant act of bullying,” Wang said.
China’s economy has slowed due to the collapse of the domestic real estate market and previous coronavirus pandemic lockdowns, and President Xi Jinping has ramped up production of EVs and other products, pushing production beyond what the Chinese market can absorb. We are trying to accelerate growth by doing this.
The strategy further exacerbates tensions with Washington, which says it is determined to avoid a larger conflict while boosting its manufacturing industry to compete with China.
“China’s factory-led economic recovery and weak consumption growth, leading to overcapacity and aggressive exploration of overseas markets, combined with the impending US election season, make it ripe for expanding the US trade ratio with China,” he said. It has become a recipe.” Eswar Prasad, professor of trade policy at Cornell University.
Europeans are also worried. The EU launched an investigation into Chinese subsidies last fall and could impose import taxes on Chinese EVs.
After President Xi Jinping’s visit to France last week, European Commission President Ursula von der Leyen warned that government-subsidized Chinese EVs and steel were “flooding the European market,” adding, “The world is… “We cannot absorb China’s surplus production.”
The Biden administration believes that China is trying to dominate the EV and clean energy sectors globally through subsidies to manufacturing, but the administration believes that supporting its industry will help increase domestic supply to meet U.S. demand. It is claimed that it is aimed at securing.
“We are not looking to gain global dominance in manufacturing in these areas, but these are strategic industries and we want to ensure healthy and vibrant companies for supply chain resilience. “We believe that this is the case,” the Ministry of Finance said. Secretary Janet Yellen said.
The tensions extend far beyond trade disputes to deeper questions about who will lead the global economy as seemingly indispensable nations. China’s policies could make the world more dependent on its own factories, increasing China’s influence in geopolitics. At the same time, the United States said it wants countries to operate to the same standards to ensure fair competition.
China claims the tariffs violate global trade rules that the United States originally helped establish through the World Trade Organization. The party accused the U.S. of continuing to politicize trade issues and said Friday the new tariffs would exacerbate problems caused by tariffs the Trump administration previously imposed on Chinese goods and which Biden has maintained. He said he would.
These issues are at the heart of November’s presidential election, with a sharply divided electorate appearing to be united by the idea of taking a hard line against China. Biden and Trump have overlapping but different strategies.
Biden believes targeted tariffs are necessary to protect key industries and workers, while Trump has called for broad 10% tariffs on imports from rivals and allies. I’m threatening you.
Biden is betting his presidential legacy on keeping the United States ahead of China in government investment in factories to make electric vehicles, computer chips and other advanced technologies.
President Trump told supporters that the United States is falling further behind China by not betting on oil to keep its economy powered despite the risks of climate change. The former president may believe he can change China’s behavior with tariffs, but he believes the U.S. will depend on China for EV parts and solar cells.
“Joe Biden’s economic plan is to make China rich and America poor,” he said at a rally in Wisconsin this month.
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AP Automotive Writer Tom Krisher contributed to this report from Detroit.
