The Biden administration will likely raise trade tariffs against China in hotly contested political battleground.
The Biden administration could impose new tariffs on Chinese products as early as next week, several sources told Bloomberg, Reuters, and other Western outlets. The move would represent the highest peak in the US-China trade war to date.
The new plan would target Chinese electric vehicles, solar panels, wind turbines, medical supplies, and other strategic equipment. The measure on electric vehicles would be the hardest, with sources claiming the new tariffs will be four times higher than the current ones.
China became the world’s largest EV producer in 2023, overcoming Germany and Japan. The overproduction of the Asian giant alarmed Western carmakers in the US and Europe, pushing for additional control.
Last year, the European Commission launched a probe into China’s subsidies to the EV industry. Meanwhile, European firms including Stellantis, Volkswagen, and Mercedes began partnering with Chinese start-ups.
Similarly, American carmakers pushed for legislative protection against Chinese vehicles while also pushing for private cooperation with local firms. Tesla, one of the world’s largest EV makers, recently partnered with China’s tech giants for a full rollout of its self-driving software.
Earlier this year, China’s BYD passed Tesla as the world’s largest EV maker. At the time, Tesla’s CEO Elon Musk said trade barriers were needed to avoid the destruction of the US car industry.
Political battleground
Former US President Donald Trump initiated a trade war with China by imposing trade barriers aggressively against the Asian nation.
Donald Trump was a Republican president and lost the 2020 elections to Democrat candidate Joe Biden. The new administration changed many things, but kept restrictions against China and, in some cases, extended them.
The largest restriction placed by Biden so far concerns the semiconductor industry. The current administration regards semiconductors as an industry of great strategic importance. At the moment, most of the world’s cutting-edge semiconductors are manufactured in the Asia-Pacific regions.
Biden’s CHIPS Act, enacted in 2021, allocated billions of dollars in subsidies for domestic semiconductor manufacturing, while also electing restrictions against microchip exchanges with China.
According to sources who spoke with Reuters, the new trade barriers will include further restrictions on semiconductors.
Joe Biden and Donald Trump will face once again in the 2024 US election. Trump pledged to raise tariffs against China by 60%, more than Biden’s new plan.
While certainly tamer than Trump’s approach, Biden wants the US electorate to know he won’t go easy on China. Six months before the election, both candidates need as many bullets in their guns as possible.
