In an effort to impede Beijing’s development of vital technology and give priority to US production, President Joe Biden is raising tariffs on $18 billion in Chinese imports in a few key industries that are considered critical to national security.
Imported steel and aluminum, legacy semiconductors, electric vehicles, battery components, critical minerals, solar cells, cranes, and medical products will all be subject to higher tariffs. The new tariff rates will go into effect over the course of the next two years. They start at 100% for electric cars, 50% for solar components, and 25% for every other sector.
“China’s using the same playbook it has before to power its own growth at the expense of others. China’s simply too big to play by its own rules,” said Lael Brainard, director of the White House National Economic Council.
Former President Donald Trump imposed a tariff program on $300 billion in Chinese imports during his presidency, citing a clause in US trade law that permits tariffs to be used to hinder competition that threatens national security interests. The same trade law mandates that the efficacy of such tariff schemes be examined every four years, and the Biden administration’s decision comes after the outcome of the said assessment.
Officials at the White House said they also changed the program’s criteria to match Biden administration’s policy goals include the shift to renewable energy. “China can’t be the only country that produces clean technology for the world we need. We need diversified, not concentrated, production of our most critical goods and technologies. … That’s the kind of dynamic we think will produce resilient supply chains and clean technology,” a senior administration official told CNN.
“It was important to have a large enough step-up in the tariffs to ensure that we try to level the playing field,” another senior administration official told CNN.
How did China respond to Biden’s move?
Wang Wenbin, spokeswoman for the Chinese foreign ministry, told reporters on Tuesday that China opposes “the unilateral imposition of tariffs which violate (World Trade Organization) rules, and will take all necessary actions to protect its legitimate rights.”
“This will severely affect the atmosphere for bilateral cooperation,” China’s commerce ministry was quoted as saying by AFP.
Beijing asked the United States to “promptly correct its erroneous actions and revoke the additional tariff measures imposed on China.”