Biden Announces New Tariffs on $18B of Chinese Imports, 100% Tax Hike on EVs

President Joe Biden has announced a significant increase in tariffs on $18 billion worth of Chinese imports, including electric vehicles, lithium-ion batteries, and solar panels, in an effort to boost US industries and counter China's nonmarket trade practices.

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Nitish Verma
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Biden Unveils Tariffs on $18B of Chinese Imports, 100% Tax on EVs

Biden Unveils Tariffs on $18B of Chinese Imports, 100% Tax on EVs

President Joe Biden announced on Tuesday a sweeping set of tariff increases on $18 billion worth of Chinese imports across various strategic industries. The move includes a 100% tax hike on electric vehicles (EVs) such as the low-priced Seagull EV from Chinese automaker BYD. The new tariffs also impact lithium-ion batteries, semiconductors, aluminum and steel, solar panels, and medical products.

Why this matters: The tariffs have significant implications for the global clean energy complex and the ongoing trade tensions between the US and China. The move could also have a ripple effect on the global economy, influencing the development of critical supply chains and the prices of key clean energy goods.

The Biden administration's objectives with the tariffs are threefold: to foster the growth of the US clean energy complex, ensure fair competition in clean energy technologies, and slow China's development of dual-use technologies that could be repurposed for its defense industrial base. The tariffs aim to boost US industries and counter what the White House considers China's nonmarket trade practices and overcapacity.

"China's simply too big to play by its own rules," said Lael Brainard, White House national economic adviser. She argued that China is "using the same playbook it has before to power its own growth at the expense of others by continuing to invest despite excess Chinese capacity and flooding global markets with exports that are underpriced due to unfair practices. "

Experts believe the tariffs will have significant impacts. Joseph Webster, senior fellow at the Atlantic Council's Global Energy Center, notes that the tariffs will curb China's industrial capacity and reduce the probability of China making breakthroughs in battery technologies. Josh Lipsky, senior director of the Atlantic Council's GeoEconomics Center, states that the Biden administration is trying to get ahead of the curve, especially on EVs, and avoid repeating past mistakes of not countering China's unfair trade practices.

In the short term, the tariffs are likely to raise the price of key clean energy goods or at least prevent these goods from decreasing in price. The tariffs will also have a major impact on the development of critical supply chains, including those for personal protective equipment. China has indicated it will retaliate against the tariff hikes. "All necessary measures to defend its rights and interests," a Foreign Ministry spokesperson said on May 10, 2024.

The tariff hikes mark a significant escalation in the ongoing trade tensions between the US and China. The Biden administration argues the targeted tariffs are necessary to protect vital US industries and technologies. However, the move risks further straining bilateral relations and could lead to higher prices for American consumers on certain products.

Key Takeaways

  • Biden announces tariffs on $18B of Chinese imports, targeting EVs and clean energy.
  • Aim: boost US clean energy, counter China's trade practices and overcapacity.
  • Brainard criticizes China's unfair practices, flooding global markets.
  • Experts predict tariffs will curb China's industrial capacity.
  • Biden aims to stay ahead in EV tech, counter China's trade practices.