Pictured is U.S. Treasury Secretary Janet Yellen
The United States imposed tariffs on China, and Treasury Secretary Yellen shouted that she did not want China to fight back. It's not as simple as it seems. The Biden administration has stopped pretending, and at the beginning of its presidency, it talked about whether to cancel the tariffs imposed on Chinese products during the Trump era, but now the old mistakes have not been changed, and new accounts have been added.
Why is the U.S. focusing on China's electric vehicles? To answer this question, it is necessary to first look at a set of data. The U.S. imposed a preferential tariff of 2.5% on imported electric vehicles, and the Trump-era trade war with China imposed a 25% tariff on electric vehicles imported from China. This offsets the market advantage of China's electric vehicles, effectively keeping Chinese electric vehicles out of the U.S. market.
The picture shows the loading site of China's new energy vehicle export
According to data, in the first quarter of this year, only one Chinese car company exported 2,217 electric vehicles to the United States, and China's electric vehicles exported to the United States accounted for only about 5% of all exports. The U.S. market is really a nice-to-have for Chinese EV makers.
This time, the Biden administration wants to increase the rate of tariffs from 25% to 100%, which sounds like a big amplitude, but the actual effect is very limited, and the form is greater than the content. In this regard, even Chinese car companies do not care. Bloomberg reported that tariffs "will not weaken China's economic growth."
What's more interesting is that U.S. Treasury Secretary Janet Yellen also said in an interview that the tariffs were a decision made by President Biden in response to U.S. concerns. Yellen also said that the Biden administration hopes that China will not make a major response, but she acknowledged that there is a possibility.
From the actions and statements of the United States, we can see two points: first, to suppress China through tariffs and promote the "decoupling" of the Sino-US economy, on this issue the Biden administration and Trump are in the same vein. After this year's U.S. election, if Trump is elected, the U.S. will be even more aggressive.
Pictured is U.S. President Joe Biden
But more importantly, this round of tariffs also shows that the United States has almost played the cards in its hand, and now it can only take some symbolic measures. According to a Reuters report, in addition to electric vehicles, solar cells and solar panels produced in China are also affected. However, the US market accounted for only 0.1% and 0.03%, and the impact was also not significant. Yellen's call for China is in the hope of reducing the negative effects and stabilizing Sino-US relations.
But even so, we should not be fooled by the superficial appearance, and we should weigh the possible impact of this round of tariffs in full. Recently, US politicians have spared no effort to hype up the theory of "China's overcapacity", and the main purpose is to "lead the way" for other countries, especially the European Union. In fact, since last year, the EU has launched a countervailing investigation against Chinese electric vehicles. Since March this year, the European Union has begun to register the import of Chinese electric vehicles.
Compared with the United States, the EU market is much more important to Chinese automakers. For example, from October last year to January this year, the EU imported more than 177,000 electric vehicles from China in just four months. Anxiety is beginning to grow within the EU about competition from China, with some calling for measures to protect EU manufacturers. However, the EU is still in a quandangle, especially for countries like Germany, which have economic interests in China, and fears that the trade war will hurt itself.
The picture shows China's fishery-photovoltaic complementary photovoltaic power generation project
In this context, the United States is trying to convince the EU that the so-called "Chinese overcapacity" is threatening the EU's interests. An article in the Atlantic Council of the United States scared the European Union, saying that the European Union did not take measures against China's solar panels because it was afraid of China's countermeasures. And now for China's electric vehicles, if the EU does not do it, it will repeat the mistakes of the past. The article can't wait to educate the EU to "learn the lessons of history."
To sum up, although the Biden administration's tariffs this time did not directly have a big impact on Chinese car companies, they actually set an example for the European Union. If China does not retaliate, the EU is likely to follow the example of the United States. "Boiled frogs in warm water" are the most terrifying.