The United States was revealed to have raised tariffs on electric vehicles to 100% as soon as next week, and it will also start with medical devices

Observer.com

2024-05-11 07:55Posted on the official account of Shanghai Observer.com

On May 10, Bloomberg, the Associated Press and the Wall Street Journal and other U.S. media successively quoted news that the Biden administration announced tariffs on China as soon as next week, involving key areas such as electric vehicles, batteries and photovoltaics, of which the tariffs imposed on Chinese electric vehicles will rise to 100%. Reuters then exclusively broke the news that the Biden administration's tax hike also includes medical devices.

The Biden administration is expected to impose new tariffs on Chinese-made medical devices such as syringes and personal protective equipment when it unveils new tariffs next week, but the size and scope of the tariffs are unclear, two people familiar with the matter told Reuters.

The move is part of the Biden administration's broader strategy to protect the U.S. from medical device supply shortages, sources said.

Reuters noted that the pandemic exposed a lack of production of critical medical equipment in the United States, from protective clothing and masks to ventilators, when the United States turned to China for help to fill the gap. U.S. imports of syringes from China, which peaked at $348 million in 2021, have fallen to around $167 million in 2023, according to official U.S. data.

Earlier on the 10th, Bloomberg quoted people familiar with the matter as saying that the Biden administration is preparing to announce a tariff measure targeting China's key strategic industries as early as next week, and will impose new, targeted tariffs on industries including electric vehicles, batteries and solar equipment.

Two of the people familiar with the matter said that the U.S. government is expected to make an announcement next Tuesday (15th). In addition to imposing new tariffs on a number of key industries, the announcement will also largely maintain the existing tariffs on China. The specifics are unclear and the White House declined to comment.

The Wall Street Journal and the Associated Press, citing sources, reported that the Biden administration is focusing on industries that "have areas of strategic competition and national security." Under Biden's new plan, tariffs on Chinese EVs will quadruple from 25% to 100%. Previously, a number of congressmen from both parties pressured the White House to directly ban the import of Chinese electric vehicles.

In April this year, Tesla announced a mass layoff of 10,000 employees. Picture from Visual China

People familiar with the matter said that the series of measures is the result of an evaluation and review of the tariff policy on China during the Trump administration.

During the Trump administration, in the name of "national security", he practiced unilateralism and protectionism, and in 2018 and 2019, he invoked Section 301 (commonly known as Section 301 of the U.S. Trade Act of 1974) to impose tariffs on Chinese imports.

After the current US President Joe Biden took office, although he repeatedly claimed that he was "considering reducing tariffs on China", he has not taken substantive action for a long time, and still insists on most of the tariffs during the Trump era. Bloomberg previously mentioned in a report that the Office of the United States Trade Representative (USTR) began assessing tariffs on China in 2022, but did not mention a specific time for the end of the assessment.

The fact is that the tariffs imposed by the US Government on China have long made the US business circles dissatisfied. In March last year, the U.S. International Trade Commission also admitted that after an investigation, it was found that the Trump administration threatened to "make China pay", but it was actually U.S. importers and consumers who paid the price, and the import prices of U.S. companies and U.S. prices rose accordingly. According to Bloomberg, this means that American companies bear almost the entire cost of the US tariffs on China.

However, with the U.S. election approaching in November and China's electric vehicles, photovoltaics and other products selling well all over the world, in order to grab political benefits, the Biden administration began to play the idea of raising tariffs, and has been making frequent moves since the end of last year.

In February, Biden issued a statement announcing that he would take "unprecedented action" to prevent Chinese connected cars and trucks, including electric vehicles, from entering the U.S. market. Some auto industry officials later revealed that the Biden administration was considering raising tariffs on Chinese electric vehicles. In April, the Biden administration announced that it would impose tariffs on Chinese steel and aluminum three times. At the same time, U.S. officials have been hyping up the topic of so-called "overcapacity" in China.

In addition, the Mexican government announced on April 22 that it would impose temporary import tariffs of 5% to 50% on 544 items such as steel, aluminum, and textiles. Many analysts believe that Mexico's move to target Chinese goods is the result of pressure from the United States.

In response to reports that the Biden administration will impose tariffs on China, Chinese Foreign Ministry spokesman Lin Jian responded on the 10th that the previous US administration imposed 301 tariffs on China, which seriously interfered with the normal economic and trade exchanges between China and the United States, and has been ruled by the WTO to violate WTO rules. Instead of correcting its erroneous practices, the US side continues to politicize economic and trade issues and abuse the so-called Section 301 tariff review procedure to further increase tariffs.

Lin Jian said: We urge the US side to earnestly abide by WTO rules, cancel all tariffs imposed on China, and refrain from increasing tariffs. China will take all necessary measures to defend its rights and interests.

The Associated Press and Reuters analysis pointed out that Biden's adoption of the same tax hike on China as his predecessor Trump before the election clearly violated the long-standing free trade consensus in the United States, and wanted to tell voters that "they all take a tough attitude towards China." But at a time when tensions are rising in the world's two largest economies, the measures could provoke retaliation from China, triggering a broader trade conflict.

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