Biden has directed the U.S. Trade Representative to increase import tariffs on steel, solar cells, semiconductors, electric vehicles, batteries and other products. That’s the right thing to do.
Official announcement: The Biden administration The long-awaited “Section 301” tariff review is completed. In addition to raising tax rates on Chinese products, there are moves to increase tax rates on many products in important sectors.
U.S. Trade Representative Katherine Tai will be held responsible for implementing the tariff increases. stated in a statement This is in response to “China’s unfair technology transfer policies and practices that continue to burden U.S. commerce and harm U.S. workers and businesses.” USTR Secretariat also announced 193 page report It lays out the consequences of a necessary review of tariffs originally introduced under the Trump administration.
“Strengthening Section 301 tariffs to combat China’s unfair trade practices is absolutely the right thing to do for America’s future,” said Scott Paul, president of the American Manufacturing Alliance. stated in a statement.
“While the nature of China’s unfair trade practices changes from time to time, the goal is always clear: disrupt global norms, undermine U.S. economic security, and pursue growth at the expense of other countries.” Paul continued later. “Section 301 tariffs, along with investments in industry and infrastructure, and Buy America domestic preferences, form the framework for her effective 21st century industrial policy for America.”
Notably, the Office of the U.S. Trade Representative recommended that all Section 301 tariffs remain in place. This was not a given when Biden first took office, as he faced intense pressure from importers and importers. misguided critic To eliminate tariffs.But ultimately, the Biden administration concluded “China’s unfair trade practices regarding technology transfer, intellectual property, and innovation threaten U.S. businesses and workers,” and “China also floods global markets with artificially low-cost exports.” , for sectors where Section 301 was maintained and many tariffs were increased.
Here are the key areas where the USTR is moving to increase tariff rates and when those increases are expected to begin.
Electric car: Under the Biden administration’s proposal, China’s EV import tariffs would be increased by 100%. It’s a big boost, but it’s necessary. As we warned, About collision course reports, if artificially cheap Chinese cars are allowed to penetrate the U.S. market, it would lead to an “extinction-level event” for the U.S. auto industry. The United States must never allow the Chinese government to succeed in its plans to control automobiles through a variety of unfair trade practices. Strong trade measures are absolutely necessary in this critical area.
semiconductor: Biden plans to raise tariffs by 50% in 2025 on this critical industry, which has been a major focus of his administration’s industrial policy in recent years. As of May 14, CHIPS and the Science Act have encouraged nearly $400 billion in U.S. semiconductor and microelectronics investments, and reaping real benefits from these investments requires strong trade enforcement actions. is necessary.
Solar cells: Like semiconductors, the domestic solar industry has received a major boost in recent years thanks to the Biden administration’s industrial policy efforts. The Inflation Control Act helped spur massive investment in clean energy. $77 billion in new investment In this area since Biden took office. But solar power in particular is facing intense pressure due to artificially cheap imports from China, which is also putting the domestic industry in jeopardy. Once before it almost completely disappeared, major trade actions are needed to strengthen U.S.-made solar power. The Biden administration’s plan to raise solar prices by 50% in 2024 is a good start.
battery: The administration is proposing a 25% increase in tariffs on non-lithium-ion battery components, lithium-ion electric vehicle batteries, and lithium-ion non-electric vehicle batteries. The first two he tariffs on lithium-ion non-electric vehicle batteries are scheduled to take effect in 2026, while the tariffs will jump in 2024. Batteries are a vital industry and will become even more important as the transition to electric vehicles continues. It is critical for both national and economic security that the United States has the manufacturing capacity to manufacture them. China currently has a monopoly on battery production. maintain overcapacity within the sector. Trade action is essential to level the playing field and ensure that the United States can expand its own production.
Steel and aluminum products: Biden also proposes increasing imports of these critical metals by 25% in 2024 from China, which has faced an onslaught of unfair trade goods for decades.we wrote for a long time The threat China’s overcapacity poses to steel and aluminum and why trade measures, including Section 232 measures on global imports, are so important. Additional tariffs on Chinese metal imports are appropriate given China’s continued failure to resolve its massive overcapacity problem.
Medical equipment and PPE: Remember during the COVID-19 pandemic? When the US couldn’t make what it needed• Although many promises were made to increase domestic production of key medical supplies and personal protective equipment; It turns out that actually getting the job done is difficult.. The main reason is Artificially cheap imports from China This is distasteful given that China cut off our supply of personal protective equipment when we needed it most. Increased measures to level the playing field for U.S. producers have been welcomed, with the Biden administration proposing a 25% increase in tariffs on masks and medical gloves and a 50% increase in duties on syringes and needles. are doing. Most are scheduled to go into effect this year. The tariff hike on gloves is scheduled to take effect in 2026.
Other product areas where Mr. Biden is proposing to increase tariffs include natural graphite (which will increase by 25% in 2026). “Other” important minerals (25% in 2024). Permanent magnets (25% in 2026). Shipments to land-based cranes (25% in 2024).
President Biden is expected to formally release the USTR findings and announce trade enforcement actions at the White House today. AAM President Scott Paul will also be in attendance. I will be posting a summary of the event on my blog later on Tuesday.
