E-cars and solar products
USA is considering new tariffs on goods from China
December 21, 2023, 12:01 p.m
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US President Biden’s administration has retained most tariffs on Chinese goods. Apparently she is now even considering expanding it. The focus is, among other things, on electric cars, which are already subject to high taxes. The move could also be a harbinger of the election campaign in the USA.
The US government apparently wants to better protect the domestic industry in green technologies against cheap competition from China. The Biden administration is discussing raising tariffs on some Chinese goods, including electric vehicles, sources said. A review of the taxes that has been ongoing for some time is scheduled to be completed at the beginning of 2024. Representatives of the incumbent administration were divided on trade policy for a long time, but maintained the tariffs from the era of Biden predecessor Donald Trump on Chinese goods worth around $ 300 billion.
Even on the European stock exchanges, the considerations apparently triggered concerns about a new trade conflict. Car stocks were among the losers. Individual stocks such as the German manufacturers BMW and VW lost 1.4 percent, at times even more. “Since the EU had also announced competition investigations, there are concerns about possible countermeasures from China,” commented one dealer: “And of course that would predominantly affect German manufacturers.” At the same time, market participants also cashed in following the stocks’ recent gains.
Chinese electric cars are already subject to a 25 percent tariff when imported into the USA. This is also why state-subsidized manufacturers from the People’s Republic have not yet been able to establish themselves on the US market. A further increase in tariffs here would likely have little immediate impact on U.S. consumers.
But possible tariff increases also target Chinese solar products and batteries for electric cars, the insiders said. While the USA now imports materials for solar systems primarily from Southeast Asian countries, China is still an important supplier of battery packs for e-mobility. If President Biden were to raise tariffs here, he could demonstrate that he would take a tough stance towards China if he had to run against Donald Trump again in the 2024 election campaign.
“I won’t let this happen”
In contrast, some tariffs on Chinese consumer goods could be reduced, insiders said. These are those that are considered less strategically important. Previous discussions about tariffs on Chinese goods have not yet led to any changes under Biden. Spokespeople for the Office of the U.S. Trade Representative and the National Security Council declined to comment.
The talks are said to have intensified recently, it said. The government is watching with concern that China is flooding global markets with low-priced fossil-free energy products while the domestic economy is collapsing, it said. US government officials fear that American companies may not be able to compete with China’s export production despite existing tariffs and subsidies.
“China is determined to dominate the electric vehicle market through unfair trade practices, but I will not let that happen,” Biden told members of the US auto union UAW in November. Treasury Secretary Janet Yellen had previously pushed for a reduction in some China tariffs. She saw this as an opportunity to combat high inflation. U.S. Trade Representative Katherine Tai and others advocated for maintaining tariffs to maintain pressure on Beijing. If tariffs on Chinese imports were to be increased now, it would be a setback for efforts to stabilize relations between the USA and China.