Washington, DC – The Biden administration is preparing to make a significant decision on China tariffs in the coming week, targeting key strategic sectors while diverging from Trump’s broad approach, according to sources familiar with the matter.
The decision follows a review of Section 301 tariffs implemented under the Trump administration starting in 2018. The new tariffs will primarily focus on industries such as electric vehicles, batteries, and solar cells, with existing levies expected to remain in place. An announcement is reportedly scheduled for Tuesday.
President Biden’s move signifies a major step in the economic competition with China, building on previous actions such as increasing tariffs on Chinese steel and aluminum. The decision also coincides with a fresh investigation into China’s shipbuilding industry.
In response to the news, the yuan weakened, and the CSI 300 Index of Chinese shares initially dropped before bouncing back. The upcoming tariffs could have implications for investors, particularly in green-tech sectors like battery manufacturing.
China’s Foreign Ministry criticized the tariffs imposed by the previous administration, stating that they disrupted economic and trade relations between the two countries. The Ministry urged the United States to lift the restrictions and indicated that China would take measures to protect its interests.
President Xi Jinping’s push to boost manufacturing domestically has raised concerns abroad, with US and EU leaders expressing unease over state support leading to an influx of cheap exports. The EU, for instance, has initiated an investigation into EV subsidies which may result in additional tariffs by July.
President Biden emphasized the need for fair competition with China, standing against what he views as unfair economic practices and industrial capacity. The impending tariffs are expected to impact specific industries, such as EV manufacturing and solar exports, potentially sparking further retaliation from China.
The decision on tariffs will be carried out by the Office of the US Trade Representative, with the aim of making them more strategic and effective. The move comes after Biden proposed new tariffs on Chinese steel and aluminum to support the American steel sector, following through on pledges made during the election campaign.
The ongoing trade tensions between the US and China have seen periods of escalation and de-escalation, with both countries engaging in tit-for-tat measures. As the Biden administration navigates these complex dynamics, the impact of the upcoming tariffs on the broader economic relationship between the two nations remains to be seen.