Biden raises US tariffs on electric cars from China to 100 percent
Published: Tuesday, May 14th 2024, 11:30
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US President Joe Biden is blocking the entry of electric cars from China into the US with special tariffs of 100 percent. The US government is also imposing new or significantly increased tariffs on solar cells, semiconductors, port cranes and medical products such as cannulas and protective masks, among other things.
China is flooding global markets with artificially cheap exports, according to the US government's announcement on Tuesday. At the same time, the measures are limited to a few strategically important areas.
Biden is striving for a stable relationship with China, the director of the White House's National Economic Council, Lael Brainard, assured journalists. She did not want to speculate on possible retaliatory measures from Beijing. According to the US government, imports from China worth 18 billion dollars are affected by the new measures.
Customs already at 25 percent
Chinese electric cars were already subject to tariffs of 25 percent in the USA, which - unlike in Europe - kept them out of the market. Chinese manufacturers receive unfair subsidies and could distort competition with cheap vehicles as a result, said Biden's economic advisor Brainard. Chinese electric car exports had risen by 70 percent in 2023 - and that would jeopardize investments in other countries, the US government argues. "The president will not allow that to happen here," Brainard said. Tesla boss Elon Musk, among others, warned earlier this year about the superiority of Chinese manufacturers: "If there are no trade barriers, they will pretty much destroy most other car companies in the world."
In his home town of Scranton in the state of Pennsylvania, Biden had seen what happens when production moves to other countries, said the trade representative. That is why he wants to ensure fair competition. Biden, who intends to stand for re-election in November, has made tens of billions available for investments in the chip industry, infrastructure and manufacturing, among other things, during his time in office. Biden's predecessor Donald Trump had already imposed tariffs on imports from China.
The other special tariffs for Chinese products in detail:
- Solar cells: Tariffs will rise from 25 to 50 percent this year. Chinese production capacities in the sector are on track to be twice as high as the global demand expected in the short term, Brainard warned. This is also due to unfair practices. In each production step, China controls more than 70 percent of global capacity - and this jeopardizes security of supply. In Germany, the solar company Meyer Burger from Switzerland closed its production site in Saxony, citing price pressure from the Far East.
- Port cranes: New tariffs of 25 percent are being imposed on the large machines that load and unload ships. The US government wants to build more port cranes in its own country again. Last year, there were also warnings that the technology built in China could pose a risk of espionage or sabotage.
- Medical devices: A new duty of 50% will be introduced for syringes and needles. For some protective masks, customs duties will rise from the previous maximum of 7.5 percent to 25 percent. For medical gloves, the increase from 7.5% to 25% will be postponed until 2026.
- Semiconductors: tariffs are set to rise from 25 to 50 percent by 2025. Although the most modern chips do not come to the USA from China, semiconductor technology from older production processes is used in cars and household appliances, for example. At the same time, Biden is spending 39 billion dollars to subsidize new chip factories in the USA. This is also seen as a matter of national security.
- Steel and aluminum: For some metal products, the tariffs will rise from 7.6 to 25 percent. Brainard pointed out, among other things, that the Chinese steel industry relies on production processes with higher CO2 emissions, while American manufacturers are investing in more climate-friendly technologies.
- Batteries: Tariffs on lithium-ion batteries for electric cars are set to rise from 7.5 to 25 percent this year. For such batteries for other technology, the increase will be postponed until 2026. There are also tariffs of 25 percent for some electronic components such as magnets.
China repeatedly complains about the coercive economic measures taken by the USA. Instead of correcting the tariffs deemed a violation by the WTO under former President Donald Trump, the US continues to politicize economic and trade issues, said Chinese Foreign Ministry spokesman Lin Jian recently. Beijing will take all necessary measures to defend its interests, he said.
China denies that its economic policy promotes surpluses. "The so-called problem of Chinese overcapacity does not exist, neither from the point of view of comparative advantage nor in the light of global demand," emphasized China's head of state and party leader Xi Jinping recently in France during his visit to Europe. Instead, the People's Republic argues that its "green energy" industry has reduced global inflationary pressure and contributed to the fight against climate change. US ministers had already criticized the economic practices of the Chinese during previous visits to China.
©Keystone/SDA
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