Biden to Impose Up to 100% Tariffs on Chinese Electric Vehicles and Clean Energy Goods

The Biden administration is set to announce a significant increase in tariffs on Chinese electric vehicles, batteries, and solar panels, potentially raising rates to 100%. The move aims to protect the US clean energy sector from cheap Chinese imports and level the playing field for domestic manufacturers.

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Bijay Laxmi
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Biden to Impose Up to 100% Tariffs on Chinese Electric Vehicles and Clean Energy Goods

Biden to Impose Up to 100% Tariffs on Chinese Electric Vehicles and Clean Energy Goods

The Biden administration is set to announce a significant increase in tariffs on Chinese electric vehicles, batteries, and solar panels next week, potentially raising rates to as high as 100%. The move aims to protect the US clean energy sector from cheap Chinese imports and level the playing field for domestic manufacturers.

Why this matters: The tariffs have significant implications for the global clean energy industry, as they may influence the pace of adoption and innovation in the sector. Furthermore, the move could escalatetrade tensions between the US and China, potentially affecting the global economy.

The announcement, scheduled for Tuesday but subject to change, is part of a review of Section 301 tariffs first imposed under former President Donald Trump in 2018. The new tariffs are expected to focus on key strategic sectors, while maintaining existing levies on approximately $360 billion worth of Chinese goods.

Treasury Secretary Janet Yellen is heading to the G7 Finance Ministers meeting in Italy to coordinate similar actions from other countries and present a united front against China. "We don't think the playing field is level," Yellen said in an interview with Marketplace. "And we think China is massively subsidizing investment in this set of industries that they have targeted as critical to their growth prospects."

The tariff rate on electric vehicles is expected to quadruple from roughly 25% to 100%. Democratic and Republican lawmakers in Congress have called for increased protections for the US auto industry against cheap EVs from China. "Allowing heavily subsidized Chinese vehicles to enter the U.S. marketplace would endanger American automotive manufacturing," said U.S. Sens. Debbie Stabenow, Gary Peters, and Sherrod Brown in a letter to the Biden administration.

The Biden administration has invested in domestic production of batteries and solar panels through signature legislation like the CHIPS and Science Act and the Inflation Reduction Act. The planned tariff hike is seen as a significant political signal, with Biden and Trump jostling over who more strongly supports protecting American industry from cheap Chinese products.

China has criticized the tariff measures, calling them counterproductive and harmful to the US and global economy. "Instead of correcting its wrong practices, the United States continued to politicize economic and trade issues," said Lin Jian, Chinese Foreign Ministry spokesman. However, President Biden maintains his stance, stating, "I'm not looking for a fight with China. I'm looking for competition, but fair competition."

The full scope of the incoming tariffs, including rates and the total list of impacted sectors, remains unclear. The White House declined to comment on the matter. China's yuan weakened on the news, while the CSI 300 Index of Chinese shares fell as much as 0.6% in early trading before rallying. U.S. Sen. Chuck Grassley expects Beijing to respond to the tariffs, possibly by targeting agricultural exports.