President Biden increases tariffs on billions of Chinese chips and cars in the U.S.

President Joe Biden recently announced a significant increase in tariffs on various Chinese imports, including electric vehicles (EVs), computer chips, and medical products. This move is aimed at addressing what the White House views as unfair Chinese practices that pose risks to U.S. economic security by flooding global markets with cheap goods.

In response, China quickly stated its opposition to the tariff hikes and threatened to take measures to defend its interests. The U.S. will retain some of the tariffs put in place by the previous administration while imposing new ones, such as quadrupling duties on EVs to over 100%.

The new tariffs target $18 billion worth of Chinese goods, including steel, aluminum, semiconductors, batteries, critical minerals, solar cells, and cranes. This action comes in the wake of a significant trade gap between the U.S. and China, with the U.S. importing significantly more goods than it exports to China.

According to White House National Economic Adviser Lael Brainard, China has been using unfair practices to boost its own growth at the expense of other countries, leading to excess production capacity and underpriced exports. U.S. Trade Representative Katherine Tai justified the revised tariffs by citing ongoing intellectual property theft and cyber intrusions by China targeting American technology.

Although President Biden’s tariff actions align with the previous administration’s tough trade stance, they also critique the effectiveness of Trump’s trade deal with China. The Biden administration seeks to carefully target the tariffs, collaborate with allies, and address inflation concerns while not escalating tensions with Beijing.

Looking ahead, additional tariffs are set to take effect in 2025 and 2026 on a range of products including semiconductors, lithium-ion batteries, graphite, permanent magnets, and rubber medical gloves. The administration is also imposing tariffs on EVs, batteries, solar cells, and other critical products to address concerns over economic dislocation caused by unfair trade practices.

In conclusion, President Biden’s tariff measures reflect a broader shift away from free trade consensus, signaling a more assertive approach towards addressing trade imbalances and unfair practices. The administration aims to strike a balance between confronting China on trade issues and avoiding a full-blown trade war that could harm both economies.