Trump’s “Trump World”: The Importance of High-Target Implications for the United States and the Electric Vehicle Industry
Trump had made tariffs on China one of his signature policy moves when he was in the White House. Some Democrats warned that American consumers would pay the price for this, and that it could hurt the economy.
According to a statement by the treasury secretary, she raised concerns about artificially cheap Chinese imports during her trip to Beijing last month. She said that new tariffs are needed to protect American workers and companies from a flood of unfairly traded products.
The move comes as Biden pushes forward to implement three pieces of legislation that contain hundreds of billions of subsidies to boost the domestic manufacturing and clean energy sectors — and ahead of a presidential election where trade and jobs will again be an issue.
Lael Brainard, Biden’s top economic adviser, said China’s unfair practices had harmed communities in Michigan and Pennsylvania, which were able to come back due to Biden’s investment agenda.
According to Michael Froman, who was the U.S. Trade Representative in the 1990s, it’s hard politically to reduce tariffs once they’re imposed because affected industries are used to them.
The White House has tried to distinguish its strategy from Trump’s approach. It points to comments made by Trump in rallies and interviews that he would broaden tariffs on all imported goods, including targeting Chinese cars, if he wins the election — something that they said would hike consumer prices.
The White House has downplayed the risk that the new tariffs could spark retaliation from China, saying that the issues have been discussed during meetings of top U.S. and Chinese officials, and were unlikely to come as a surprise.
The US is trying to boost domestic manufacturing while its trade tension with China is getting worse. All in all, the increased tariffs are expected to affect around $18 billion in annual imports.
The Biden administration is making it a point to make it difficult for China to be involved in the EV industry. Chinese-made EVs are more affordable than models made by other countries, with the BYD Seagull costing between $10,000 and $40,000. But high tariffs have effectively blocked China from importing its EVs to the United States. The current rate of 25 percent is being raised to 100 percent.
The US EV industry could be impacted by higher tariffs. Tariffs on battery parts and lithium-ion batteries for EVs will increase to 25 percent from 7.5 percent this year. The increase for non-EV batteries will be in effect in the year 2026. By 2025, the tariff rate on semiconductors from China will double to 50 percent.
The Biden administration is considering tariffs on solar panels from four countries in Southeast Asia, after a Commerce Department investigation determined that Chinese companies were skirting tariffs by moving products through other countries.
Roughly 40% of the solar grade polysilicon manufacturing in China takes place in the Xinjiang region, which is why the US blocks imports from there.
