Biden Hits Chinese Electric Cars and Solar Cells with Higher Tariffs

US President Joe Biden has announced significant tariff increases on Chinese-made electric vehicles (EVs), solar panels, steel, and other critical goods. The White House’s decision, which includes a dramatic rise to a 100% border tax on electric cars from China, aims to protect American jobs and industries.

“We will not let China unfairly control the market for essential goods,” Biden declared. “This is about ensuring a secure supply of essentials here at home, especially after what we’ve learned from the pandemic.”

The newly imposed tariffs, announced on Tuesday, are set to impact approximately $18 billion worth of imports. In addition to the steep increase on electric vehicle tariffs from 25% to 100%, levies on solar cells will jump from 25% to 50%. Specific steel and aluminum products will see their tariff rates more than triple to 25%, up from 7.5% or less.

China’s response was swift and critical. The commerce ministry stated that these measures would “severely affect the atmosphere for bilateral cooperation,” and vowed to take retaliatory actions to safeguard its interests.

Analysts suggest that the tariff hikes are largely symbolic, aimed at rallying support in a challenging election year. Former President Donald Trump, Biden’s rival in the upcoming election, has criticized the move, arguing that Biden’s support for electric cars will harm the US auto industry.

“They’re flooding the market,” Biden stated. “It’s not competing – it’s cheating.”

The tariffs are an expansion of the border taxes initially imposed under Trump’s administration, which cited unfair trade practices as the justification. Despite receiving nearly 1,500 comments from business owners arguing that these tariffs drive up consumer prices, the Biden administration has opted to extend and expand them.

Wendy Cutler, vice-president of the Asia Society Policy Institute and former US trade official, noted, “It’s all about trade-offs. While cars may become more expensive in the short term, the long-term goal is to foster a competitive domestic industry.”

In a briefing, White House officials dismissed allegations that domestic politics influenced their decision, emphasizing that Beijing’s harmful practices, such as forced information sharing and market flooding, necessitated a firm response.

“Ensuring that green technologies are not dominated by a single country is crucial for a successful and sustainable transition,” stated a White House official.

The move has sparked discussions among other global economies, particularly in Europe, where similar measures are being considered. The impact on the business world is closely watched, especially given the relatively small volume of EV imports to the US from China.

Despite the heated debate, the tariff hikes are seen by some experts as having a minimal economic impact. Oxford Economics described the latest measures as “more symbolic bark than bite,” predicting a negligible effect on inflation and economic growth.

The US-China trade war, which began in 2018 under Trump, continues to evolve with these new tariffs. As both nations prepare for possible retaliatory measures, the global trade landscape remains in flux, reshaping patterns and influencing economic strategies worldwide.

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