President Joe Biden announced tariff increases on $18 billion Chinese imports to prioritize production of goods in the U.S. and thwart Beijing's development of critical technologies.
According to CNN, the increase in tariff will be applied on important products such as legacy semiconductors, electric vehicles, imported steel and aluminum, solar cells, critical minerals, and even medical products.
The tariff hikes, which is set to take place over the next two years, will see tariff on electric vehicles raise by 100%. In addition, solar components will suffer a 50% increase and other sectors will have the least percentage tariff increase of 25%.
Biden will retain the tariffs imposed by former president Donald Trump, while increasing rates of other products, said the White House. The government views Chinese unfair practices of proliferating cheap goods in the global market as an "unacceptable risk" to the security of the US economy.
In 2023, the U.S. imported $427 billion worth of goods from China, but exported only a fraction thereof to the Asian country which only amounted to $148 billion, Reuters reported. This huge gap between Chinese imports and exports has been persisting for many years, and the subject has also been a point of contention in Washington.
"China's using the same playbook it has before to power its own growth at the expense of others by continuing to invest, despite excess Chinese capacity and flooding global markets with exports that are underpriced due to unfair practices," Lael Brainard, the White House National Economic Adviser, told reporters during a conference call.
With the increase in tariffs, Chinese EVs that used to enjoy a 27.5% rate will see the number increasing several fold. This is meant to challenge the practice of the Asian country of producing EVs at very low prices while levying a hefty 40% tariff on car imports from the U.S. The latest move also protects U.S. manufacturers from cheap imports.
CNN's report also noted that a senior administration official underscored that the increase in tariffs is a means to ensure that the U.S. is trying to level the playing field.
Judging by the previous response of China, where it hit back with tariffs on $101.4 billion in U.S. exports when the former president imposed his tariff policy back then, one could only surmise the kind of counterpunches Beijing would be readying the moment.
