President Joe Biden imposed significant new tariffs on Chinese electric vehicles, advanced batteries, solar cells, steel, aluminum and medical equipment, lashing out at Donald Trump along the way as that he was adopting a strategy that increases friction between the world’s two largest economies.
The Democratic president said Tuesday that Chinese government subsidies ensure that the country’s companies do not have to turn a profit, giving them an unfair advantage in global trade.
“American workers can outwork and outcompete anyone as long as the competition is fair,” Biden said in the White House Rose Garden. “But for too long, it hasn’t been fair. For years, the Chinese government has been pumping public money into Chinese companies… that’s not competition, that’s cheating.”
China immediately promised retaliation. Its Commerce Ministry said Beijing was opposed to U.S. tariff hikes and would take steps to defend its interests.
Biden will maintain tariffs put in place by his Republican predecessor Donald Trump while raising others, including quadrupling tariffs on electric vehicles to more than 100 percent and doubling tariffs on tariffs on semiconductors at 50 percent.
The new measures affect $18 billion in imported Chinese goods, including steel and aluminum, semiconductors, electric vehicles, critical minerals, solar cells and cranes, the White House said. The electric vehicle figure, while headline-grabbing, could have more political than practical impact in the United States, which imports very few Chinese electric vehicles.
The United States imported $427 billion worth of goods from China in 2023 and exported $148 billion worth to the world’s second-largest economy, according to the U.S. Census Bureau, a trade deficit that has persisted for decades and is becoming a topic increasingly sensitive to Washington.
U.S. Trade Representative Katherine Tai said the revised tariffs were justified because China was stealing American intellectual property. But Tai recommended tariff exclusions for hundreds of categories of industrial machinery imports from China, including 19 for solar manufacturing equipment.
The tariffs come amid a heated campaign between Biden and Trump, his Republican predecessor, to show who is tougher on China.
Asked to respond to Trump’s comments that China was eating America’s lunch, Biden said of his rival: “He’s been feeding them for a long time.” The Democrat said Trump had failed to crack down on Chinese trade abuses as he pledged to do during his presidency.
Karoline Leavitt, press secretary for the Trump campaign, called the new tariffs a “weak and futile attempt” to distract from Biden’s own support for electric vehicles in the United States, which Trump says will lead to layoffs in automobile factories.
Administration officials said their measures were combined with domestic investments in key sectors and were unlikely to worsen an inflation crisis that has already angered American voters.
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Biden has struggled to convince voters of the effectiveness of his economic policies despite low unemployment and above-trend economic growth. A Reuters/Ipsos poll last month showed Trump with a seven percentage point advantage over Biden on the economy.
Analysts have warned that a trade dispute could raise the costs of electric vehicles overall, hurting Biden’s climate goals and his goal of creating manufacturing jobs.
Biden has said he wants to win this era of competition with China, but not start a trade war. He has worked in recent months to ease tensions during one-on-one talks with Chinese President Xi Jinping.
Both 2024 U.S. presidential candidates have strayed from the free-trade consensus that once reigned in Washington, a period capped by China’s accession to the World Trade Organization in 2001. The imposition of tariffs broader tariffs by Trump during his 2017-2021 presidency sparked a tariff war with China. .
As part of the long-awaited tariff update, Biden will increase tariffs from 25 percent to 100 percent this year on electric vehicles, bringing the total tariff to 102.5 percent, from 7.5 percent to 100 percent. 25 percent on lithium-ion batteries for electric vehicles and other battery parts and 25 to 50 percent on photovoltaic cells used to make solar panels. Some essential minerals will see their customs duties increased from nothing to 25 percent.
Further tariffs will follow in 2025 and 2026 on semiconductors, as well as lithium-ion batteries not used in electric vehicles, graphite and permanent magnets, and rubber medical and surgical gloves.
A number of lawmakers have called for massive tariff hikes on Chinese vehicles or an outright ban over data privacy concerns. There are relatively few Chinese-made light vehicles currently imported.
The United Auto Workers, a politically important union that supported Biden, said the tariff changes would ensure “the transition to electric vehicles is a just transition.”
