PRESIDENT Joe Biden will double, triple and quadruple tariffs on some Chinese goods this week, unveiling the measures at a White House event framed as a defence of American workers, sources familiar with the matter say.
Biden will hike or add tariffs in key sectors after nearly two years of review. The total tariff on Chinese electric vehicles (EVs) will rise to 102.5 per cent from 27.5 per cent, the sources said, speaking on condition of anonymity ahead of the announcement. Others will double or triple in targeted industries, though the scope remains unclear.
Biden and his staff spent recent weeks finalising the measures, including which items to hit and which to avoid because the inputs are needed to fuel American growth, one of the sources said. The final decision was a consensus, the source said.
It’s not clear which items were spared but Biden will not announce tariff rate reductions, two of the sources said. The administration has signalled to the US solar industry that it will move to exclude some items, including machinery used to make solar panel components. The shift has been sought by some equipment makers who say current levies undermine Biden’s goal of wresting clean-energy supply chains from China.
The 2024 presidential race looms large over the flagship announcement: Biden is trying to crack down on China and differentiate himself from Donald Trump – whose original tariffs Biden is set to largely renew, but who is seeking widespread hikes that the current administration views as going too far.
The Biden administration has been “focused on sectors of longstanding concern”, said Greta Peisch, a partner at law firm Wiley Rein who served until January as the top trade lawyer for the US Trade Representative’s office.
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“These are calculated to address particular activities and risks and avoid escalation, to maintain the relationship with China that we have” outside those key goods, she said.
The White House declined to comment on the tariffs. The auto-tariff quadrupling was first reported by The Wall Street Journal.
Biden will target key sectors including EVs, batteries, solar cells, steel and aluminium, sources have said. He has previously announced the steel and aluminium tariffs, which will increase to 25 per cent on some products that have a 7.5 per cent rate or no tariffs now. The EV rate aims to protect the US from a potential flood of Chinese autos that could upend the politically sensitive auto sector.
Trump’s 200 per cent
The announcement is the culmination of a review of tariffs first imposed by Trump, who mocked the announcement during a campaign rally in New Jersey on Saturday (May 11).
“He says he’s going to put a 100 per cent tariff on all Chinese electric vehicles. Isn’t that nice?” Trump said. “Biden should have done this four years ago.”
He warned that Chinese companies will try to build cars in Mexico, then avoid tariffs by shipping them to the US under the US-Mexico-Canada Agreement, which Trump agreed to as president. Trump said he’d put a 200 per cent tariff on Chinese-made cars in Mexico.
“I will put a 200 per cent tax on every car that comes in from those plants, and they are not going to do that,” he said. Trump has also pledged a 60 per cent across-the-board tariff on all Chinese goods – a move Biden is stopping well short of, with allies saying it would fuel inflation.
Biden’s measures are less about crushing segments of the market than heading off an anticipated increase in imports: Chinese steel, aluminium and autos make up tiny fractions of the US supply for now. The administration has warned that China is pushing to corner the market on key sectors and flood the US with subsidised goods, to destabilise its rival and power its own recovery.
Still, the jockeying signals a bipartisan consensus – led by the two presumptive candidates for the presidency – on the threat that Chinese EVs pose to the US.
It did not damp enthusiasm for the US debut of Zeekr Intelligent Technology Holding, the high-end electric car brand under Zhejiang Geely Holding Group, which rose 35 per cent on Friday after an expanded initial public offering that’s the biggest US listing by a China-based company since 2021. One of its executives downplayed the planned tariffs.
“We are not considering short-term headwinds. We think long-term and try to make sure in the long run we make a very, very good business case,” chief financial officer Jing Yuan told Bloomberg Television on Friday. “It’s more about long-term view rather than short-term headwinds.”
The administration’s approach is consistent with its goal to target China while maintaining a relationship, Peisch said.
“It’s about being strategic, not an across-the-board escalation, but what makes sense as a response to China and support for impacted US sectors,” she said. BLOOMBERG
