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Biden unveils tariff hikes on Chinese EVs, solar cells, semiconductors, other imports

By Yonhap

Published : May 15, 2024 - 08:58

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US President Joe Biden speaks in the Rose Garden of the White House in Washington, Tuesday, announcing plans to impose major new tariffs on electric vehicles, semiconductors, solar equipment and medical supplies imported from China. (AP-Yonhap) US President Joe Biden speaks in the Rose Garden of the White House in Washington, Tuesday, announcing plans to impose major new tariffs on electric vehicles, semiconductors, solar equipment and medical supplies imported from China. (AP-Yonhap)

US President Joe Biden plans to quadruple tariffs on Chinese electric vehicles and hike duties for solar cells, semiconductors and other "strategic" sectors, the White House said Tuesday, as he is revving up his reelection campaign.

The Biden administration announced a new package of tariff increases, casting it as an endeavor to protect American workers and businesses from what it calls China's unfair trade practices, and accusing China of flooding global markets with "artificially low-priced exports."

Under the package, it plans to hike tariffs this year on Chinese EVs from 25 percent to 100 percent, on solar cells from 25 percent to 50 percent, on certain steel and aluminum products from up to 7.5 percent to 25 percent and on lithium-ion EV batteries from 7.5 percent to 25 percent.

Tariffs on semiconductors will double to 50 percent by next year while those on certain medical products, such as syringes and needles, will increase to 50 percent from zero this year. Tariffs on natural graphite and permanent magnets will also rise from zero to 25 percent in 2026.

Biden directed his trade representative to increase tariffs under Section 301 of the Trade Act of 1974 on $18 billion worth of imports from China, according to his office.

Renewing its criticism of China's "unfair" and "non-market" practices, the White House underscored that American workers and businesses can "outcompete anyone" as long as they have fair competition.

Washington has repeatedly raised concerns over China's acts, policies and practices related to technology transfer, intellectual property and innovation, which it claims have continued to impose a burden on US commerce.

"Following an in-depth review by the US trade representative, President Biden is taking action to protect American workers and American companies from China's unfair trade practices," the White House said in a release.

"To encourage China to eliminate its unfair trade practices regarding technology transfer, intellectual property and innovation, the president is directing increases in tariffs across strategic sectors," it added.

The tariff hikes stoked concerns over their potential impact on inflation though US officials brushed them aside.

"There's no inflationary impact of these actions. They're mainly targeting strategic sectors where we are ramping up domestic investment," a senior administration official said in a background press call on Monday.

"I think what would be inflationary is ... across-the-board, 10 percent type of tariff that would pose a real risk to consumers, which we're not doing here. There is a very targeted set of tariffs on specific sectors," the official added, referring to the proposal that former President Donald Trump has made as part of his reelection campaign.

China's commerce ministry said it "firmly" opposes the tariff increase, while vowing to take "resolute" measures to safeguard its rights and interests, according to Xinhua News Agency.

Commenting on the tariffs, US Trade Representative Katherine Tai reiterated her commitment to using "every lever" of her office to promote American jobs and investments.

"Today, we serve our statutory goal to stop the PRC's harmful technology transfer-related acts, policies and practices, including its cyber intrusions and cyber theft," she said in a statement, referring to China by its official name, the People's Republic of China."

"I take this charge seriously, and I will continue to work with my partners across sectors to ensure any action complements the Biden-Harris administration's efforts to expand opportunities for American workers and manufacturers."

Commerce Secretary Gina Raimondo framed the tariff package as Biden's "decisive" action to safeguard America's industrial competitiveness and economic security.

"We know the PRC's playbook -- we've seen their non-market actions on solar and steel -- and cannot allow China to undermine US supply chains by flooding the market with artificially cheap products," she said.

In a separate statement, Treasury Secretary Janet Yellen called attention to her trip to China last month, where she raised concerns over China's industrial overcapacity.

"President Biden and I have seen firsthand the impacts of surges of certain artificially cheap Chinese imports on American communities in the past, and we will not tolerate that again," she said.

"These overcapacity concerns are widely shared by our partners across advanced economies and emerging markets, motivated not by anti-China policy but by a desire to prevent damaging economic dislocation from unfair economic practices."

The hikes came as Trump has floated the idea of raising tariffs to 60 percent or more on all imports from China in addition to his proposal for a 10-percent "universal" baseline tariff. (Yonhap)