The Biden administration has finalized substantial tariff hikes on Chinese imports, set to take effect on September 27.
This decision includes a 100% tariff on Chinese electric vehicles (EVs), a 50% duty on solar cells, and a 25% tariff on steel, aluminum, EV batteries, and critical minerals. The US Trade Representative (USTR) announced these changes on Friday, marking a significant escalation in trade tensions between the two countries.
The new tariffs are part of a broader strategy to bolster US industries by addressing what the administration views as unfair competition from Chinese state-driven production and subsidies. Lael Brainard, the White House’s top economic adviser, stated that the tariffs aim to reduce the reliance on Chinese supply chains and encourage the growth of domestic industries in EVs, solar technology, and semiconductors.
The 100% tariff on Chinese EVs is intended to counteract what Brainard described as an “unfair cost advantage” that has allowed Chinese electric vehicles to rapidly gain market share internationally. Additionally, tariffs on Chinese semiconductors will increase by 50%, effective from 2025. The decision also affects other sectors, with increased tariffs on medical face masks, surgical gloves, and syringes.
The administration’s move comes despite calls from various industries, including the auto sector, to reduce tariffs on essential materials like graphite and critical minerals for EV batteries. The USTR’s final decision largely maintains the tariff levels announced in May, with limited adjustments.
China has criticized the tariff hikes, labeling them as “bullying” and arguing that the success of its EV industry is due to innovation rather than government support. In response, China has indicated potential retaliatory measures.
The new tariffs coincide with a period of heightened political activity, as Vice President Kamala Harris and former President Donald Trump both court voters in key manufacturing states. Trump has proposed even steeper tariffs on Chinese imports, including a 60% rate on all Chinese goods.
The decision also includes temporary relief measures, such as exclusions for port cranes ordered before the May tariff announcements and delays in the tariff increases on medical supplies to allow for a transition to non-Chinese suppliers.
With input from Reuters, Bloomberg, CnEVPost, and ForeXLive.
