Biden hikes tariffs on imports from China

The White House said that the decision has come in response to China’s ‘unfair trade practices’ and to counteract the resulting harms…reports Asian Lite News

President Joe Biden has directed his Trade Representative to increase tariffs on $18 billion of imports from China, including semiconductors, solar cells, batteries, and critical minerals to ‘protect’ American workers and businesses, the White House said in a statement on Tuesday.

The White House said that the decision has come in response to China’s ‘unfair trade practices’ and to counteract the resulting harms.

“China’s unfair trade practices concerning technology transfer, intellectual property, and innovation are threatening American businesses and workers. China is also flooding global markets with artificially low-priced exports. In response to China’s unfair trade practices and to counteract the resulting harms, today, President Biden is directing his Trade Representative to increase tariffs under Section 301 of the Trade Act of 1974 on $18 billion of imports from China to protect American workers and businesses,” the White House statement read.

The statement on hiked tariffs on imports from China also noted that the Chinese government has used unfair and non-market practices for too long now.

“China’s forced technology transfers and intellectual property theft have contributed to its control of 70, 80, and even 90 percent of global production for the critical inputs necessary for our technologies, infrastructure, energy, and health care–creating unacceptable risks to America’s supply chains and economic security,” the White House said.

“Furthermore, these same non-market policies and practices contribute to China’s growing overcapacity and export surges that threaten to significantly harm American workers, businesses, and communities,” it added.

The US and the European Union have often expressed their concern over “industrial overcapacity” in China that is impacting their domestic companies.

US Treasury Secretary Janet L Yellen met with the Economic Working Group (EWG) and Financial Working Group (FWG) between the US and China in April this year following her trip to Beijing and Guangzhou. “The US delegation continued to express concerns about China’s non-market practices and industrial overcapacity,” the US Treasury Department had said after the meeting.

“Both sides agreed to further discuss these issues,” according to a readout on the meeting. In a meeting between Xi Jinping and President Emmanuel Macron of France, Ursula von der Leyen, the European Commission president, urged the visiting Chinese President to address “the wave of subsidized exports flowing from his nation’s factories into Western countries,” NYT reported.

“These subsidized products — such as the electric vehicles or, for example, steel — are flooding the European market,” von der Leyen said. “The world cannot absorb China’s surplus production,” von der Leyen was cited in the US daily.

China cries foul

“Firmly opposing” the new US tariffs, China warned that the trade barriers would affect the wider relationship between the two economic superpowers and Beijing will “resolutely work” to defend its interests, CNN reported.

China’s Commerce Ministry also said that the move is against US President Joe Biden’s earlier stand of not seeking to ‘contain’ or ‘decouple’ with Beijing.

This comes hours after Biden announced that tariffs on USD 18 billion worth of imports of Chinese electric vehicles and an array of other products would soar over the next two years.

The White House said the measures were designed to protect American workers and businesses in the face of China’s unfair trade practices, including “flooding global markets with artificially low-priced exports.”

China “firmly opposes” the new tariffs, the country’s Commerce Ministry said in a statement.

“The increase in…tariffs by the United States contradicts President Joe Biden’s commitment to ‘not seek to suppress and contain China’s development’ and ‘not to seek to decouple and break links with China,'” it said. “This action will seriously impact the atmosphere of bilateral cooperation.”

The Chinese Ministry further said Beijing would take “resolute measures” to defend its rights and interests and urged the Biden administration to “correct its wrongdoing.”

Following this move, EVs imported from China will see their tariffs more than quadrupled from 27.5 per cent to 100 per cent.

According to CNN, this policy lever is meant to challenge Beijing’s practice of encouraging aggressively low pricing by domestic EV manufacturers while levying a 40 per cent tariff on US car imports.

In addition to EVs, increased tariffs will apply to imports of Chinese steel and aluminium, legacy semiconductors, battery components, critical minerals, solar cells, cranes, and medical products.

Tariffs on solar cells and semiconductors will double to 50 per cent, while the remainder of the targeted imports will attract tariffs of 25 per cent.

“China opposes the unilateral imposition of tariffs which violate (World Trade Organization) rules, and will take all necessary actions to protect its legitimate rights,” Chinese foreign ministry spokesperson Wang Wenbin told reporters shortly before the announcement.

Notably, China’s global trade surplus in goods has soared in recent years and is now approaching $1 trillion, stoking tensions with the US and Europe. (ANI)

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