September 13, 2024 – Washington, D.C. — The Biden administration has unveiled significant increases in tariffs on a range of Chinese imports, marking a decisive action to bolster protections for U.S. industries against China’s state-driven economic practices. The new tariffs include a 100% duty on electric vehicles (EVs) and substantial increases on other critical imports.
Details of the Tariff Increases
The U.S. Trade Representative (USTR) has set forth the following new tariffs, effective September 27, 2024:
- 100% Duty on Chinese electric vehicles.
- 50% Duty on solar cells.
- 25% Duty on steel, aluminum, EV batteries, and key minerals.
Additionally, starting in 2025, a 50% Duty will be applied to Chinese semiconductors, including newly added categories like silicon wafers and polysilicon used in solar panels. A new 25% Tariff will apply to lithium-ion batteries, minerals, and components related to EVs, while tariffs on all other devices will commence on January 1, 2026.
Impact and Reactions
The tariff adjustments largely maintain the increases announced in May by President Joe Biden. These measures continue the trade policy approach initiated under former President Donald Trump, who imposed tariffs on over $300 billion worth of Chinese goods, including various consumer and industrial products.
The new tariffs have sparked complaints from various industries. Automakers, in particular, had advocated for lower tariffs on graphite and critical minerals essential for EV battery production, but their appeals were largely ignored. The Information Technology Industries Council criticized the tariffs, arguing that they have already cost American businesses and consumers $221 billion without addressing the core issues of Chinese trade practices.
White House Justification
Lael Brainard, the top White House economic adviser, defended the decision, stating that the tariffs aim to encourage diversification away from Chinese supply chains. She emphasized the need for “tough, targeted” measures to counteract China’s state subsidies and technology transfer policies, which have resulted in excessive production capacity and global market flooding.
Chinese Response
A spokesperson for China’s embassy in Washington condemned the new tariffs, labeling them as “unilateralism and protectionism.” The spokesperson argued that the tariffs would not effectively address U.S. industrial challenges and warned that China would take necessary measures to protect its interests.
Political Context
The timing of these tariff increases aligns with the ongoing presidential election campaign, with candidates like Donald Trump and Vice President Kamala Harris positioning themselves as strong on China. Trump has promised even higher tariffs, up to 60% on all Chinese imports.
Temporary Relief for Specific Sectors
The final decision includes some temporary relief measures:
Port Operators: Exclusions will be granted for Chinese port cranes ordered before May 14, 2024, and delivered by May 14, 2026.
Medical Supplies: Tariffs on medical face masks and surgical gloves will increase to 50%, with a delayed start to allow for a transition to non-Chinese suppliers. The duty on Chinese syringes will rise to 100%, though a temporary exclusion for enteral syringes will be granted for one year.
The USTR will also consider requests for tariff exclusions on specific industrial machinery categories.
This comprehensive tariff update is expected to have far-reaching effects on trade dynamics between the U.S. and China, impacting industries and supply chains across the board.
