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■China Economic Times reporter Zhou Zixun
The United States has once again wielded the "big stick of tariffs" and indiscriminately exercised protectionism.
On the evening of May 14, the U.S. government announced that it would impose tariffs on $18 billion worth of products imported from China under Section 301 of the 1974 Trade Act.
The tariffs cover China's electric vehicles, batteries, critical minerals, steel and aluminum, semiconductors, solar cells, ship-to-shore cranes, and medical products. Among them, in 2024, the tariff rate for electric vehicles will be increased from the current 25% to 100%, the tariff rate for lithium-ion electric vehicle batteries will be increased from 7.5% to 25%, the tariff rate for battery components will be increased from 7.5% to 25%, and the tariff rate for solar cells (whether assembled into a template or not) will be increased from 25% to 50%, etc. Some of the measures will come into effect in 2026.
Gao Lingyun, a researcher at the Institute of World Economics and Politics of the Chinese Academy of Social Sciences, told the China Economic Times that the US government's tariff hike was not sudden, but had been planned for a long time. Whether it is U.S. Treasury Secretary Janet Yellen's visit to China or U.S. Trade Representative Katherine Tai's visit to Europe, to a certain extent, they are all preparing for and paving the way for the tariffs. The logic behind it is, first, to serve Biden's election to gain more support from voters in swing states. The second is to maintain the leading position of the United States in the field of new energy by suppressing China. Third, the intention of forcing Europe to follow the tariffs and jointly contain China's development is clearly revealed.
"Biden's imposition of high tariffs on China comes at a time of the 6th anniversary of the U.S. tariff war against China, and has expanded into emerging areas where China has advantages and potential competitiveness." Zhang Monan, deputy director and researcher of the U.S. and European Research Department of the China Center for International Economic Exchanges, said in an interview with a reporter from the China Economic Times that its purpose is to curb the rise of China's scientific and technological power by improper tariff means and prevent China from making innovative breakthroughs in advanced manufacturing and strategic industries. In addition to the strategic intention of containing and suppressing China, considering that the Biden administration announced this move on the eve of the US presidential election, it can be considered not only an economic competition strategy against China, but also a "political show" for the Biden administration to participate in the election campaign.
In an interview with a reporter from the China Economic Times, Wei Fulei, director of the Center for Finance, Taxation, Trade and Industrial Development Research of the Comprehensive Development Research Institute (Shenzhen, China), pointed out that recently, the United States and Europe have politicized and instrumentalized trade issues, and frequently hyped up the so-called "overcapacity theory" in China. The WTO has long ruled that Section 301 violates WTO rules, and instead of correcting it, the United States has intensified and continued to raise tariffs, which violates Biden's commitment to "not seek to suppress and contain China's development" and "not seek to decouple and break the chain with China", and is not in line with the consensus reached by the two heads of state.
In Wafley's view, the U.S. tariffs on China's "new three" products represented by electric vehicles, lithium batteries, and photovoltaic cells reflect the U.S. anxiety about China's leading edge in these areas. However, as far as the US tariffs are concerned, the impact on China's related industries is limited. The U.S. has already imposed a 27.5 percent tariff on Chinese cars, and China exports very few electric vehicles to the U.S.; Since 2009, the United States has implemented a "double reversal" on mainland PV, and has been using tariff barriers to restrict the import of PV products. However, none of this has hindered the continuous improvement of the international competitiveness of the mainland's new energy industry.
Gao Lingyun also said that the impact of the tariffs on China is very limited, except for medical products exported to the United States, the impact on other exports is controllable.
At the same time, Waverey believes that this move by the United States will provide an exemplary role for Europe. Europe is one of the main markets for new energy products on the mainland, and the European Union is also following the United States in advocating China's "overcapacity theory" and has also carried out relevant countervailing investigations. If the United States and Europe are linked, it will have a greater impact on the export of the mainland's new energy industry.
"In response to the absurd move of the U.S. government to impose tariffs again, we need to actively respond to it, take comprehensive measures, and resolutely fight back." Zhang Monan said that on the one hand, in response to the unreasonable actions of the United States, China should take active countermeasures, effectively safeguard China's interests, and seize the initiative in the game against the United States. On the other hand, in view of the fact that the US act is suspected of violating the principle of most-favored-nation treatment of the World Trade Organization (WTO) and the principle of tariff concession commitments among WTO members, China should take the initiative to safeguard its legitimate and lawful rights and interests, and file a complaint with the WTO if necessary.
Waverey also suggested that the mainland should resolutely struggle against US hegemonism, sue the United States for its trade protection policy with the WTO and other international organizations, and implement reciprocal countermeasures against US policies, such as imposing tariffs on US soybeans, chemical products, airplanes, and other goods. At the same time, we should speed up the process of "going global" of mainland industries, build a win-win industrial chain and supply chain interest community through cooperation, and deal with the impact of protectionism.
Gao Lingyun pointed out that we still need to maintain strategic focus when responding. From the perspective of the government, considering that the amount of tariffs imposed this time is not very large, US products can be countered accordingly. At the corporate level, these exports that are subject to tariffs can be dealt with by finding alternative markets. In the long run, it is necessary to avoid the risk of politicized manipulation of economic issues by the United States through the international division of labor and trade in intermediate goods.
Chief Producer丨Wang Hui and Che Haigang
Producer丨Li Piguang, Wang Yu, Liu Weimin
Editor-in-Chief丨Mao Jinghui Editor丨Gu Yun