Business

Biden hits Chinese electric cars and solar cells with higher tariffs

  • By Natalie Sherman
  • Business journalist, New York

Image source, Getty Images

US President Joe Biden is raising tariffs on electric cars, solar panels, steel and other products made in China.

The White House said the measures, which include a 100% border tax on electric cars from China, were a response to unfair policies and aimed at protecting American jobs.

China said it opposed the hikes and would take retaliatory measures.

Analysts said the tariffs were largely symbolic and intended to shore up votes in a difficult election year.

They follow months of criticism from former President Donald Trump, who ran for the White House against Mr. Biden and who claimed that his rival’s support for electric cars would “kill” the American auto industry..

Mr. Biden promised Tuesday that he would not let China “unfairly control the market” for electric vehicles and other key products, including batteries, computer chips and basic medical supplies.

“If the pandemic has taught us anything, it’s that we need to have a secure supply of essential goods here at home,” he said.

The tariffs announced Tuesday will cover imports worth an estimated $18 billion, the White House said.

In addition to an increase from 25% to 100% in tariffs on electric vehicles, taxes on solar cells will increase from 25% to 50%.

Tariff rates on some steel and aluminum products will more than triple to 25%, up from 7.5% or less.

In response, China’s Commerce Ministry said the new measures would “severely affect the atmosphere of bilateral cooperation” and criticized what it called the politicization of economic issues.

Ahead of the White House’s much-anticipated announcement Tuesday, a spokesperson for China’s Foreign Ministry said it “will take all necessary measures to safeguard its legitimate rights and interests.”

The measures expand border taxes imposed by the United States on Chinese goods under Mr. Trump, citing unfair trade practices.

During the Biden administration’s review of the measures, the government received nearly 1,500 comments, the vast majority from business owners, saying they raise prices for ordinary Americans and calling for them to be removed .

Mr Biden’s decision to keep the tariffs in place and expand them to new areas – even as persistent US inflation has weighed on his approval ratings – speaks to the sea change in the trade views of both political parties Americans, who had long championed the benefits of global trade.

Wendy Cutler, a former U.S. trade official and now vice president of the Asia Society Policy Institute, said she believes Americans are willing to accept more expensive cars in exchange for helping protect American businesses and jobs.

“We’ve seen this movie before – with solar power, with steel and (aluminum), and when it comes to cars and other products, the United States needs to take a step forward. “move forward,” she said.

“It’s all about trade-offs and maybe in the short term cars become more expensive, but in the longer term we want to have a competitive industry here.”

Image source, Getty Images

In a briefing with reporters, White House officials denied that domestic politics influenced the decision.

They said Beijing has shown no signs of abandoning practices that harm the United States, including rules that force Western companies to share information with the aim of stealing it and subsidies that have allowed companies to produce products well beyond expected demand.

“They are flooding the market,” Mr. Biden said. “It’s not competition, it’s cheating.”

The White House said the tariffs were targeted and that it did not expect them to fuel inflation, contrasting their approach with Mr. Trump’s.

The former president, who once called himself a “tariff man,” campaigned for plans for across-the-board tariffs of 10 percent on foreign imports, which could rise to 60 percent for goods from from China.

He also attacked Mr. Biden for his promotion of electric vehicles, a move he said would destroy U.S. automakers, key employers in states like Michigan that will be key battlegrounds for the November election.

Erica York, senior economist at the Tax Foundation, said both candidates were “going down the same path”: higher trade barriers and looking inward “rather than looking at what we can do on the political plan that would really make our sectors more competitive. “.

She said the administration’s promotion of tariffs as strategic was a “euphemism for protecting sectors that are politically important to this administration.”

“It comes down to a political economy calculation rather than what makes the most economic sense or what is most affordable to American consumers.”

The United States already imposes high tariffs on Chinese-made electric vehicles, making sales of these cars negligible.

But Washington is cautiously watching Chinese companies’ increased sales in Europe and other countries.

White House officials have said it is critical to ensure that green technologies are not dominated by any one country for the transition to be successful and sustainable in the long term.

Although measures targeting electric vehicles will likely have minimal practical effect, the business community is waiting to see whether Europe will take similar steps, said Natasha Ebtehadj of Artemis Investment Management.

New prices – 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 European Union and the United Kingdom are among other countries debating measures to reduce imports of Chinese-made electric cars, even at the risk of slowing their adoption.

“This is not really a surprise to Chinese investors or companies, especially in the run-up to an election where both candidates are not really pro-China,” she said.

“Given the relatively small volume of imports to the United States, it is perhaps more interesting to know what happens next in Europe.”

The United States and China have been locked in a trade war since 2018, when Mr. Trump imposed tariffs on about two-thirds of goods imported from China, worth an estimated $360 billion at the time. .

The measures sparked retaliation from Beijing, an impasse that ended in relaxation in early 2020 when Mr. Trump reduced the rate of some tariffs, while China pledged to increase its purchases in the USA.

Those promises were not kept, but the tariffs have since brought in more than $200 billion, according to the United States, in new border taxes for the U.S. government, while causing a major overhaul of global trade models .

Much of this was paid for by ordinary Americans in the form of higher prices for furniture, shoes and other goods.

However, in a research note, Oxford Economics described the latest plans as “a more symbolic bark than a bite”.

The company said it was likely to increase inflation by a negligible 0.01 percentage point, while weighing on growth in a similar way, calling the effect a “rounding error.” .

Report provided by World Business Report radio

News Source : www.bbc.com
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Sara Adm

Aimant les mots, Sara Smith a commencé à écrire dès son plus jeune âge. En tant qu'éditeur en chef de son journal scolaire, il met en valeur ses compétences en racontant des récits impactants. Smith a ensuite étudié le journalisme à l'université Columbia, où il est diplômé en tête de sa classe.Après avoir étudié au New York Times, Sara décroche un poste de journaliste de nouvelles. Depuis dix ans, il a couvert des événements majeurs tels que les élections présidentielles et les catastrophes naturelles. Il a été acclamé pour sa capacité à créer des récits captivants qui capturent l'expérience humaine.
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