WASHINGTON – President Joe Biden on Tuesday imposed significant tariff increases on electric vehicles, semiconductors and other products imported from China, a move the White House says is putting U.S. industry at a disadvantage. It fought against what it called fair trade practices.
The Biden administration has accused China of flooding global markets with goods at artificially low prices, giving Chinese competitors an unfair advantage over their U.S. counterparts.
“The bottom line is, I don’t want conflict with China, I want fair competition,” Biden said at a ceremony in the White House Rose Garden before signing the memorandum ordering the tariff hikes.
White House officials said the tariff hike would create a “level playing field” for U.S. manufacturing in clean energy and microchip sectors, where the Biden administration is targeting major government investment to catch up with China. It states that it is aimed at.
Imports from China include solar cells, batteries, battery materials, cranes used in ports, some medical supplies, as well as steel and aluminum, which are subject to increased tariffs.
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more:Biden imposes huge new tariffs on electric cars, chips, other products from China
Here’s what you need to know about the tariff increase.
What is a price list?
According to Investopedia, a customs duty is a tax that one country imposes on goods and services imported from another country.
Tariffs serve several purposes. These include increasing the revenue of the country imposing the tariff, protecting domestic industry from foreign competition, and leveraging the political influence of the country paying the tariff.
Conclusion: Tariffs generally make imported products less attractive to domestic consumers.
Why is Biden doing this now?
The White House said the tariff hikes are aimed at protecting U.S. industry, which the administration has targeted for large-scale investment to catch up with China. These sectors include clean energy, electric vehicles, and microchip manufacturing.
Biden is betting his economic policy on a rekindled U.S. manufacturing boom centered on clean energy, but the White House says China is flooding the market with cheap products, putting U.S. industry at a disadvantage. He blames it.
How big is the tariff increase?
Biden has implemented significant tariff increases.
Tariffs on electric cars imported from China will increase from 25% to 100% starting this year, and tariffs on semiconductors from China will double from 25% to 50% by 2025.
Another change is that tariffs on Chinese-made lithium-ion batteries used in electric cars will be tripled from 7.5% to 25%. Tariffs on solar cells imported from China will double from 25% to 50%. And steel and aluminum products will triple this year to 25%.
How many electric cars does the US import from China?
China is not a major player in the U.S. electric vehicle market, at least not yet, according to an analysis by the Atlantic Council think tank. China shipped $368 million worth of electric vehicles to the US in 2023. In contrast, the European Union exported nearly $7.4 billion of EVs to the United States last year.
The main reason why there are so few EV imports from China is that the US already imposes a relatively high tariff of 25% on Chinese imports.
Biden accused China of unfairly supplying the market with goods. What does that mean?
White House officials said China is using unfair trade practices and disrupting global markets with exports at artificially low prices.
What are the injustices? According to the Biden administration, China subsidizes manufacturers with cheap land and easy access to loans, giving workers few rights and often working long hours at low wages. He says he hasn’t. In the auto industry, parts such as steel and electronic equipment are relatively cheap in China, giving Chinese manufacturers an additional advantage.
Chinese factories are producing more products than the country’s citizens can buy as the economy slows. This surplus gives China new incentives to export cheap goods.
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What does that mean for consumers?
Analysts and automakers have warned that a trade war with China could raise the cost of EVs, ultimately hurting consumers and hindering the Biden administration’s climate change goals.
Higher tariffs on electric vehicles, solar cells, semiconductors and other items could make these products more expensive for U.S. consumers.
For many economists, tariffs represent an additional tax for consumers because they raise prices. Biden officials countered that they do not expect large price increases because the new tariffs affect a narrow range of items.
Will inflation worsen?
Biden officials said the new tariffs were “carefully targeted” and unlikely to increase the inflation that has plagued the country for the past few years.
An Economic Policy Institute analysis found no link between tariffs imposed during the Trump era and subsequent increases in inflation in 2021 and 2022.
But economists and politicians have long recognized the link between tariffs and rising prices. Tariffs effectively impose additional taxes on the amount consumers already pay for imported goods.
Is Biden running an election policy?
White House officials insist the tariff hikes were not politically motivated, but they cannot ignore the fact that the 2024 election is just six months away.
The tariff increases will impact Mr. Biden’s efforts to win over working-class voters in swing states in the Midwest, including Michigan, the heart of the U.S. auto industry.
What does Donald Trump say about it?
Biden is borrowing from the trade strategy of former President Donald Trump, the Republican nominee who regularly raised tariffs on Chinese goods during his four years in office.
“Where have we been for the last three and a half years? They should have done it a long time ago,” Trump said Tuesday of Biden’s tariffs.
But Biden’s move is much more limited in scope than Trump’s campaign proposal. President Biden has opted for targeted tariffs on specific industries, while President Trump has proposed imposing tariffs of more than 60% not only on imports from China but also on imports from other countries. Biden warned that Trump’s plan would result in higher consumer prices for Americans.
“We need to do something similar with other vehicles, and we need to do something similar with many other products,” Trump said. “Because right now China is eating our lunch.”
Will this spark a trade war with China?
Potentially. Last week, multiple media outlets reported on the possibility of tariffs, and a Chinese Foreign Ministry spokesperson criticized the move. “China will take all necessary measures to protect its rights and interests,” the spokesperson said.
Stellantis plans to sell Chinese EVs in other parts of the world
Amsterdam-based Stellantis and Chinese EV startup Leap Motor have partnered to sell Chinese-made electric vehicles in nine European countries and other parts of the world starting in September this year.
Tuesday’s announcement did not include plans to bring Chinese EVs to the U.S. market.
“Currently, there is no real competition from China in the U.S. market,” Stellantis CEO Carlos Tavares said, noting that Europe is different. He said, “While the United States appears to be pursuing very strong protectionism, Europe continues to keep its markets moderately open for the time being with tariffs as low as 10%.”
Whether Stellantis, which owns the Jeep, Ram, Chrysler, Dodge and Fiat brands, will consider bringing Leap Motor’s EVs to the U.S. in the future depends on tariffs, Tavares said, adding that entry via Mexico is possible. Gender was also considered.
“Of course, we understand that if the Chinese want to come to the United States, they will ultimately use Mexico as a sourcing hub. I don’t know if this is acceptable to the U.S. administration,” Tavares said. Told.
