The White House announced measures that include a 100% border tax on electric cars from China, in response to what it calls unfair policies and to protect US jobs. China’s reaction has been one of strong opposition, promising retaliatory measures.
Analysts believe these tariffs are largely symbolic, aiming to secure votes in a challenging election year. The decision follows months of criticism from former President Donald Trump, who is also running for the White House and has claimed that Biden’s support for electric cars would “kill” the US car industry.
Biden has vowed not to let China “unfairly control the market” for electric vehicles and other key goods, including batteries, computer chips, and basic medical supplies.He emphasized the need for a secure supply of essentials within the US, a lesson underscored by the pandemic.
The newly announced tariffs, which affect an estimated $18 billion worth of imports, will see electric vehicle tariffs rise from 25% to 100%. Levies on solar cells will increase from 25% to 50%, while tariffs on certain steel and aluminum products will more than triple to 25%, up from 7.5% or less.
China’s commerce ministry criticized the new tariffs, saying they would “severely affect the atmosphere for bilateral cooperation” and accused the US of politicizing economic issues.A foreign ministry spokesperson promised that China would take “all necessary measures to safeguard its legitimate rights and interests.”
These moves expand on the sweeping border taxes imposed on Chinese goods under Trump, which cited unfair trade practices. The Biden administration’s review of these measures received nearly 1,500 comments, mostly from business owners arguing that they were driving up prices for everyday Americans.
Biden’s decision to leave the tariffs in place and expand them into new areas is a testament to the dramatic shift in trade views for both political parties in the US, which had long championed the benefits of global commerce. Wendy Cutler, a former US trade official, believes Americans are willing to accept higher-priced cars in exchange for protecting US companies and jobs.
In a briefing with reporters, White House officials denied that domestic politics had influenced the decision. They pointed to Beijing’s practices that harm the US, including rules forcing Western companies to share information and subsidies that allow Chinese firms to flood the market with products.
The tariffs are targeted, and the White House does not expect them to stoke inflation, contrasting their approach with that of Trump. The former president has proposed an across-the-board 10% tariff on foreign imports, which could rise to 60% for goods from China.
Both candidates in the upcoming election seem to favor higher trade barriers, with Erica York, senior economist at the Tax Foundation, noting a shift towards protectionism rather than policies that would enhance US competitiveness. The business world is closely watching to see if Europe will take similar steps, as sales by Chinese companies in Europe and other countries increase.
New tariffs – at a glance:
– Semiconductors: from 25% to 50% by 2025
– Certain steel and aluminum products: from 7.5% to 25% in 2024
– Electric vehicles: from 25% to 100% in 2024
– Lithium batteries and critical minerals: from 7.5% to 25% in 2024
– Solar cells: from 25% to 50% in 2024
– Ship-to-shore cranes: from 0% to 25% in 2024
– Rubber medical and surgical gloves: from 7.5% to 25% in 2026
The US and China have been locked in a trade war since 2018, with tariffs prompting a significant reshuffling of global trade patterns. The tariffs have yielded over $200 billion in new border taxes for the US government, but much of that sum has been paid by everyday Americans through higher prices for various goods.
Oxford Economics describes the latest plans as “more symbolic bark than bite,” with a negligible impact on inflation and economic growth, calling the effect a “rounding error.”
For further details, read the original article https://www.bbc.com/news/business-69004520
