Biden's Tariff Boost on $18 Billion Chinese Imports Sends a Strong Message to Beijing

President Joe Biden is implementing higher tariffs on $18 billion worth of Chinese imports in key sectors related to national security. This is aimed at hindering China's advancement in critical technologies and promoting American production.

The increased tariffs will affect imported steel, aluminum, legacy semiconductors, electric vehicles, battery components, critical minerals, solar cells, cranes, and medical products. These new tariff rates, ranging from 100% for electric vehicles to 50% for solar components and 25% for other sectors, will be phased in over the next two years.

Lael Brainard, director of the White House National Economic Council, pointed out that China continues to use familiar tactics to fuel its own economic growth at the expense of other countries. She emphasized that China's sheer size makes it difficult for them to adhere to fair trade practices.

During his term, former President Donald Trump implemented a wide-ranging tariff program targeting $300 billion worth of Chinese imports. He relied on a provision in US trade law that permits tariffs to be imposed in order to prevent competition that could jeopardize national security. This same trade law mandates a review of the effectiveness of such tariff programs every four years. The recent decision by the Biden administration to make changes to the program stems from this evaluation process. CNN had previously reported on the anticipated revisions.

White House officials have updated the program to align with the Biden administration's focus on clean energy. They emphasized the need for a diverse production of critical goods and technologies, not solely relying on China. This approach aims to create resilient supply chains and promote clean technology for a sustainable future.

Electric vehicles imported from China will now face a significant increase in tariffs from 27.5% to 100%. This decision aims to address the issue of Beijing's strategy to promote lower pricing among domestic EV manufacturers while imposing a 40% tariff on US car imports. For example, the Seagull electric vehicle from Chinese manufacturer BYD is priced at around $10,000, making it much more affordable compared to American competitors.

A second senior administration official emphasized the importance of implementing a substantial tariff hike to create a fairer competitive environment.

Beijing is known for imposing expensive retaliatory measures. Following Trump's announcement of tariffs, China imposed tariffs on $101.4 billion worth of US exports. This retaliation was estimated by the Brookings Institute to have impacted 294,000 American export-related jobs.

The White House has chosen not to predict how Beijing might retaliate next. Officials have highlighted ongoing investigations by European, Brazilian, and Turkish partners as supporting their stance.

"According to a senior administration official, China is currently producing goods at a rate that far exceeds the global demand."

During formal visits to China in April, Treasury Secretary Janet Yellen and Secretary of State Antony Blinken both highlighted this issue with their Chinese counterparts. The administration initially considered announcing changes in April to prepare for President Biden's tariff speech later in the month. However, they decided to postpone the announcement to maintain positive diplomatic relations during the visits, as reported by two sources familiar with the situation.

On April 17, Biden addressed the crowd at the United Steelworkers headquarters in Pittsburgh. He proposed increasing the tariffs on specific steel and aluminum products imported from China, which were previously implemented by Trump. Additionally, Biden called for a fresh inquiry into unfair shipbuilding practices. According to Biden, the Chinese government is financially supporting Chinese steel companies, leading to an oversupply of steel in the market. This oversupply drives down prices, making it challenging for other companies to compete effectively.

In his speech, Biden emphasized that China is not engaging in fair competition. Instead, he accused China of resorting to cheating tactics to gain an unfair advantage in the market.

In the Midwest manufacturing-heavy states, this message resonates well. These states, known as the blue wall, will play a crucial role for both candidates in the upcoming election, where trade will be a major issue.

However, the message did not receive a positive reaction from China. The Ministry of Commerce in China criticized the US for making "false accusations" and engaging in "wrong practices."

CNN’s Sam Fossum contributed to this report.

Editor's P/S:

The Biden administration's increased tariffs on Chinese imports are a strategic move to protect national security and promote American manufacturing. By targeting key sectors such as electric vehicles and critical minerals, the administration aims to reduce dependence on China and foster resilience in supply chains. This is a necessary step to address China's unfair trade practices and ensure fair competition. However, it is important to consider potential retaliatory measures from China and engage in ongoing dialogue to maintain diplomatic relations.

The tariffs are expected to impact a wide range of goods, including electric vehicles, aluminum, and medical products. The increase in tariffs on electric vehicles is particularly noteworthy, as it addresses China's strategy of subsidizing domestic manufacturers and imposing tariffs on US imports. This move will help level the playing field and promote the growth of the electric vehicle industry in the United States. The tariffs will also affect critical minerals, which are essential for a wide range of industries and technologies. By increasing tariffs on these minerals, the Biden administration aims to reduce dependence on China and ensure access to secure supplies.