Not only did Biden not cancel Trump's tariffs on China, but now he is copying Trump's homework and intensifying the imposition of tariffs on China. According to the Observer, on May 14, the United States released the results of the four-year review of the additional 301 tariffs on China, announcing that on the basis of the original 301 tariffs on China, it will further increase the tariffs on electric vehicles, lithium batteries, photovoltaic cells and other products imported from China. Among them, the tariff on electric vehicles has been doubled from 25% to 100%, lithium batteries have been increased from 7.5% to 25%, and photovoltaic panels have been increased to 50%. So, why is Biden doing this? Will it work? Let's talk about two topics.
First, Biden was also opposed to tariffs on China in the first place, so why is he following Trump's lead now?
During the reign of the previous US president, Donald Trump imposed tariffs on $300 billion of Chinese exports to the United States, ranging from 10 percent to 25 percent. In this regard, Biden, who was still running for president at the time, said, "This will not hit China, because the taxes and fees are passed on to American companies and Americans, and if he is elected, he will cancel tariffs on China, because it ties the hands and feet of the United States."
After taking office, Biden did implement it, and was supported by Treasury Secretary Yellen and National Security Adviser Sullivan, but U.S. Trade Representative Katherine Tai firmly disagreed, believing that this is also one of the "tools to contain China" and cannot be easily canceled.
Judging from the results of the four-year tariff review by the United States, the Office of the Trade Representative headed by Tai Qi not only maintained the tariffs on China implemented during the Trump era, but also proposed more tariff items to the Biden administration, focusing on environmental protection, such as electric vehicles, lithium batteries, photovoltaic products, etc. The reason why Biden "changed his original intention" and expanded taxes on China may have two considerations.
On the one hand, it is the fantasy of "internal disease and external treatment", by containing the "impact" of China's superior production capacity on the United States, covering up the embarrassing reality of the poor green transformation of the United States and the gradual backwardness of traditional industries. Previously, Yellen had said that the United States could not tolerate the export of large quantities of cheap goods from China to the United States, because it would make American companies unable to compete at all and could only face bankruptcy.
The United States not only does not reflect on its own backwardness and earnestly seeks out the causes, but instead imposes responsibility on China, believing that it is China's "overcapacity" and "dumping" the United States, which is very ridiculous.
The Biden administration's China policy is to "cooperate in the field of cooperation and compete in the field of competition", but from the current situation, "climate change" is one of the few areas of cooperation between China and the United States, and everything else is basically "competition". Every year at the United Nations climate conference, China and the United States will become the focus, because one represents the developed country and the other represents the developing country, and China and the United States have also reached an agreement to stabilize the global climate and environment.
Electric car washes, lithium batteries and photovoltaic products are all representative products of clean energy, and they are also vigorously promoted by China, but the United States itself cannot achieve competitiveness in this field, so it has engaged in trade protectionism and wants to use forced tariffs to prevent Chinese products from entering the American market.
Such an act not only seriously violates the relevant provisions of the WTO, but also "drags its feet" on global governance of the climate and environment. Even if the Biden administration does this, it will not achieve the goal of protecting American manufacturing, because the United States can't always close its doors, right?
On the other hand, this year is the U.S. election year, in the poll comparison with Trump, Biden has been at a disadvantage, seeing that the election day is getting closer and closer, it is impossible for Biden to be "not in a hurry", so he took out the "traditional trick" of the U.S. election - tough on China, hoping to stimulate voters and improve his poll data. However, Biden will approve of blocking the cheap and high-quality Chinese goods that the American people need most, and forcing the people to buy their own high-priced goods and increase their daily spending? Will he vote?
Second, Europe does not agree with the US approach, and also points out that there are two major "loopholes".
The Biden administration's announcement of a new round of tariffs on China, especially for electric vehicles, coincided with German Chancellor Olaf Scholz's visit to Sweden. In Europe, Germany and Sweden are both big car countries, German brands Chinese know a lot, such as Mercedes-Benz, BMW, Audi, Volkswagen, etc., Sweden also has a very famous brand in China - Volvo, so the two countries are quite familiar with the Chinese market and the Chinese automotive field.
Regarding the US approach, Scholz and Swedish Prime Minister Christersson agreed that "this is a bad idea to undermine global trade". The two also warned the EU that it should not "follow in the footsteps of the United States" in targeting Chinese electric vehicles, and that the benefits of trading with China must be taken into account. Previously, the EU also launched a trade investigation into electric vehicles exported by China, but Scholz made it clear that many of the electric vehicles exported to Europe are made by European companies in China, and the EU should not impose tariffs on Chinese electric vehicles.
While the leaders of Germany and Sweden oppose the US approach, the British Reuters news agency believes that the US imposition of 100% tariffs on Chinese electric vehicles is just a threat and has no practical effect, because China's current exports of electric vehicles to the United States are "almost zero". Moreover, it is impossible for the United States to block the entry of China-related goods into the American market by means of imposing tariffs, because there are two "loopholes" that the United States cannot avoid.
The loopholes referred to by Reuters are actually two countries – Mexico, a neighbor of the United States, and Vietnam, a neighbor of China. The West believes that Chinese companies are currently investing in more and more factories in Mexico, such as the Chinese electric car brand BYD, which has already launched such a project, and because of the signing of the US-Mexico-Canada trade agreement, it is impossible to impose tariffs on goods exported from Mexico to the United States, and a large number of Chinese goods will "go through the back door" from Mexico and enter the United States. Western media believe that it is no accident that Mexico has surpassed China to become the largest importer of the United States.
In addition, the United States has recently released information that it is ready to recognize Vietnam's "market economy" status, and if this is the case, it is impossible to levy high taxes on goods imported from Vietnam, and Vietnam is a neighbor of China, and Chinese companies themselves have a large amount of investment in Vietnam and have set up many branch factories. This means that China's exports to the United States, in addition to Mexico through the "back door", can also enter the United States through the "Vietnamese channel", and can also avoid U.S. tariffs.
However, this may be just the opinion of the Western media, and the United States cannot be completely defenseless about Mexico and Vietnam. Western media also believe that the trade integration between China and Europe is very high, and Europe is not willing to be "arbitrary" like the United States, wielding the "tariff stick" at will, and in the context of the United States' "closed" market, relevant Chinese goods will enter Europe in large quantities, thus "hurting allies". But in fact, taking electric transmission cars as an example, the entry of Chinese brands is beneficial to ordinary European people on the one hand; On the other hand, it can also improve the competitiveness of European enterprises, which is a win-win situation.