A Sweeping White House Action to Raise Tariffs on China Reflects “Lessons Learned”
A sweeping White House action to raise tariffs on China as early as this week “reflects lessons learned” about the behavior of the country, according to a former official who helped lead the government’s review of what duties should be imposed. The White House announcement expected Tuesday is the culmination of a two-year investigation and reflects economic damage that China already inflicts on the US, says Greta Peisch, who until recently was general counsel in the office of the US Trade Representative. She cited unfair trading practices in areas like solar panels and electric vehicles.
The Biden Government Review
The Biden government review began in 2022 and is focused on duties that were first imposed in the Trump administration. Its apparent conclusion this week could impact tariffs on a range of industries from electric vehicles to batteries to solar power to critical minerals. Bloomberg was the first to report the administration’s plan to announce the results of this long-awaited review.
Impact on Electric Vehicles
The announcement will quadruple tariffs on EVs from China, according to a Wall Street Journal report. That move could raise the tariff rate to roughly 100% from its current level of 25%.
“We’ve Seen the Damage Here in America”
During a press conference Friday, China’s Foreign Ministry responded to the reports by charging that “the US continues to politicize trade issues, abuse the so-called review process of Section 301 tariffs and plan tariff hikes.” “China will take all necessary measures to defend its rights and interests,” the spokesperson added.
The Politics of Tariffs
Next week’s likely announcement also comes on the heels of another Biden move that has angered China: his call last month to triple tariffs on Chinese steel and aluminum. China is “not competing, they’re cheating,” Biden said in announcing that plan, “and we’ve seen the damage here in America.”
Biden’s Approach to Trade
Biden’s approach to trade is one of sticks and carrots. He offers some credits and incentives while also saying, “There are some things that we need to produce in this country for security reasons and that is chips, batteries, critical minerals, PPE, pharmaceuticals.” The forthcoming action from the White House appears set to impact a wider array of sectors and comes after years of internal debate within the Biden administration over what direction to take on Chinese import duties.
Different Perspectives
Trump allies say he will allow manufacturing to grow organically in the US but it’s an approach often criticized by Biden allies and some trade experts as being too blunt. At such high levels, some also worry it could spur inflation. Biden’s approach, his allies insist, is one that is intended to be more strategic and only protect the areas of the economy where the national security need is highest. “This is part of a pattern of being targeted on particular concerns,” says Peisch, noting other recent administration actions have been “pretty tailored and targeted.”
