Steel and aluminum tariffs increased to 25%, with significant tariff hikes on batteries, electric vehicles, solar cells, and semiconductors.
Ahead of the upcoming election, the Biden administration has significantly increased tariffs on Chinese steel and aluminum, as well as on batteries and related materials, electric vehicles, solar cells, and semiconductors.
The White House announced, "On May 14, President Joe Biden directed the U.S. Trade Representative (USTR) to increase these tariffs under Section 301 of the Trade Act in response to China's unfair trade practices and the resulting damage." The increased tariffs will target $18 billion worth of Chinese imports.
Initially, the U.S. government will raise tariffs on certain steel and aluminum products from the current 0-7.5% to 25% by the end of the year. Last month, President Biden had already directed the USTR to increase tariffs on Chinese steel and aluminum to 25%.
Additionally, the White House announced that tariffs on lithium-ion batteries for electric vehicles will be raised from the current 7.5% to 25% by the end of the year. Tariffs on lithium-ion batteries for non-electric vehicles will rise from the current 7.5% to 25% by 2026, and tariffs on battery components will increase from the current 7.5% to 25% by the end of the year. Tariffs on key minerals such as natural graphite and permanent magnets will be raised from the current 0% to 25% by 2026, while other key minerals will see a significant increase from 0% to 25% this year.
The White House explained the necessity of these tariff increases by stating, "China's concentration of key mineral mining and refining capabilities makes U.S. supply chains vulnerable, endangering national security and clean energy goals."
In response to the recent controversy over overproduction, the U.S. government will increase tariffs on Chinese electric vehicles to 100% this year. The White House noted, "China's electric vehicle exports increased by 70% from 2022 to 2023 amidst widespread subsidies and non-market practices that pose significant overproduction risks, threatening productive investments elsewhere."
In a press release, the White House emphasized, "The 100% tariff on Chinese electric vehicles will protect U.S. manufacturers from China's unfair trade practices and advance President Biden's vision for American workers to build the future of the automotive industry in the U.S."
The White House also announced that tariffs on solar cells will be uniformly increased from 25% to 50% this year, regardless of the assembly of the solar cell modules, to protect the industry from China's policy-driven overproduction.
Furthermore, the U.S. government will increase tariffs on Chinese legacy semiconductors from the current 25% to 50% by 2025.
The White House stated, "China's policies in the legacy semiconductor sector have led to rapid market share expansion and production capacity growth, posing a risk to market-driven company investments. Increasing tariffs on semiconductors is an important early step to promote the sustainability of these investments."
Additional tariff increases include:
- STS cranes from 0% to 25% by the end of the year
- Syringes and needles from 0% to 50% by the end of the year
- Personal protective equipment (PPE) including masks from 0-7.5% to 25% by the end of the year
- Medical and surgical rubber gloves from 7.5% to 25% by 2026.
The White House stressed in a statement, "China's forced technology transfer and intellectual property theft have contributed to controlling 70%, 80%, or even 90% of global production of key inputs needed for technology, infrastructure, energy, and healthcare, creating unacceptable risks to U.S. supply chains and seriously threatening economic security."
They added, "Furthermore, these same non-market policies and practices have contributed to China's overproduction and export surge, which could significantly harm American workers, businesses, and communities."
According to local steel industry sources, some of the impetus to review trade agreements with China came from Chinese customs data showing a 30.7% increase in China's steel exports in the first quarter compared to the same period last year.
The tariff imposition has received support from U.S. steel industry leaders since the review process. Last month, American Iron and Steel Institute President Kevin Dempsey said, "Although China's direct steel exports to the U.S. have not increased as much as the customs data suggests, Chinese steel exports to third-country markets are often further processed into downstream manufacturing products supplied to the U.S."
Meanwhile, within the U.S., there is analysis that the Biden administration's actions are conscious of former President Trump, his Republican rival in the upcoming election. During his term in office in 2018-2019, Trump imposed broad high tariffs on Chinese products under Section 301 of the Trade Act and has pledged to impose additional massive tariffs on China if re-elected. Therefore, there is speculation that Biden's tariff increases may have been influenced by Trump's pledges.
Trump, who has promised a "universal tariff of 10%," has indicated that tariffs on China could exceed 60% and that he would impose 100% tariffs on cars made in Mexico by Chinese companies.
The White House stated that Biden's measures are "carefully targeted at strategic sectors," adding, "We will strengthen cooperation with global partners to address concerns about China's unfair practices rather than imposing indiscriminate 10% tariffs on products imported from all countries."
Tags
STEEL
