In October last year, British media Reuters pointed out in a report that Chinese solar panels had put "significant price pressure" on American manufacturers, forcing them to take measures. The United States is looking for an opportunity to impose a "package tax increase" on China in order to "save its own interests." In short, Chinese products cannot be allowed to continue to sell well.
It wants to impose a four-fold tariff on China
On the 10th local time, citing people familiar with the matter, the Biden administration is preparing to issue a new tariff announcement as early as the 15th (Tuesday), which aims to expand the scope of the trade war with China, especially for electric vehicles, batteries, photovoltaic solar panels, and medical equipment.
Specifically, the Biden administration plans to increase import tariffs on electric vehicles in China from the current 27.5% to a staggering 102.5%, which is almost 4 times the original, and 1-2 times for other industries. If the news is true, this move may become one of the biggest moves in the Biden administration's "economic race" with China.
From 2017 to 2021, former U.S. President Donald Trump often practiced unilateralism and protectionism in the name of "national security", and in March 2018, he announced a large-scale tariff on goods imported from China, provoking Sino-US economic and trade frictions.
After Biden took office, although he repeatedly claimed that he was "considering reducing tariffs on China", he did not take any substantive action.
Since 2021, the Biden administration has not only strictly implemented the previous administration's Section 301 tariffs and other policies, but also advocated "decoupling and de-risking" with China, creating "small courtyards and high walls", and seriously undermining the global economic and trade system. In April, President Biden proposed new tariffs of 25% on Chinese steel and aluminum as part of a series of measures to support the U.S. steel industry and attract workers in an election year.
In this regard, Bloomberg, the world's largest financial information company, believes that this proposal is largely "symbolic", because China currently exports very little of these two metals to the United States.
The same is true for photovoltaics, where China barely exports such products directly to the United States, and the vast majority of Chinese photovoltaic products enter the U.S. market through Southeast Asia. Moreover, China does not depend on the United States for PV production or exports, but on the contrary, the United States and many Western countries need to rely on China. Although tariffs have been frequently imposed on PV products produced in China, this has not changed the fundamentals of the global market.
PV expected to be exempt?
For China's photovoltaics, the Biden administration is very hesitant, on the one hand, it wants to "fight", and on the other hand, it is worried that there will be no new products to use in the future.
Recently, multiple sources revealed that the Biden administration has signaled to the U.S. photovoltaic industry that it will exclude products such as production equipment for solar panel modules from this tax increase.
U.S. solar equipment makers have been seeking such an exemption, warning that the current tariffs have weakened U.S. efforts to compete with China's clean energy supply chain, the report said.
This "waiver" rumor is reminiscent of last May, when Biden exercised his presidential veto power to overturn a congressional resolution to continue tariff exemptions for solar products from four Southeast Asian countries. Biden said at the time that he was vetoing the bill because the U.S. could not afford the new uncertainty it would create for U.S. businesses and workers in the solar industry, and that the U.S. would continue to focus on expanding U.S. production capacity to strengthen U.S. energy security.
Faced with skepticism within the White House, Biden explained that since he took office, 51 new and expanded solar equipment manufacturing plants have been announced, and the United States is now on track to increase domestic solar panel manufacturing capacity by eight times. In fact, Biden said, these industrial stimulus policies are working.
President Biden's decision has been applauded by U.S. industry, which considers solar panel imports to be crucial. Currently, less than 30% of the country's solar panels are manufactured in the United States. Abigail Ross Hopper, president and CEO of the Solar Energy Industry Association, said the House and Senate legislation requiring tariffs threatens as many as 30,000 U.S. jobs while weakening U.S. energy security. "Restricting the supply of solar products at this critical time hurts U.S. businesses and prevents us from deploying clean, reliable energy in the near term," Hopper said. ”
Industry experts said that Biden's move was based on a clear understanding that the United States could not "decouple and break the chain" from China's solar energy, a compromise made by the American business community, and objectively a "compromise" to China's solar industry.
In today's PV market, almost all countries are using solar modules from China, and if tariffs are significantly raised, US companies will have to pay as much as double the cost to procure. Then the only way is for the Biden administration to bring up the advantages of domestic competing products and produce solar panels at a similar price as China, so as to ease the competitive pressure in the industry. If the United States is unable to do this, it will be difficult to talk about raising taxes on China.
China responded
On May 10, when Foreign Ministry spokesperson Lin Jian held a regular press conference, a reporter asked about the Biden administration's announcement of new tariffs on China.
"Please ask the competent authorities for details." Lin Jian pointed out that the previous US administration's imposition of Section 301 tariffs on China seriously interfered with the normal economic and trade exchanges between China and the United States, and has been ruled by the WTO to have violated 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.
On May 14, Foreign Ministry spokesman Wang Wenbin pointed out in response to a reporter's question that the rapid development of China's new energy industry, including electric vehicles, lithium batteries and photovoltaic products, is based on continuous technological innovation, improvement of the production and supply chain system and full market competition, and the leading position achieved is the result of the combined effect of comparative advantages and market rules, rather than from the so-called "subsidies". We advise the US side to abandon the hypocrisy and double standards of inconsistent minds, and not to repeat the mistakes of protectionism.