Biden Set to Impose Tariffs on China EVs, Strategic Sectors

President Joe Biden’s administration is poised to unveil a sweeping decision on China tariffs as soon as next week, one that’s expected to target key strategic sectors while rejecting the across-the-board hikes sought by Donald Trump, people familiar with the matter said.

The decision is the culmination of a review of so-called Section 301 tariffs first put into place under Trump starting in 2018. The new tariffs will focus on industries including electric vehicles, batteries and solar cells, with existing levies largely being maintained. An announcement is scheduled for Tuesday, two of the people said.

While a decision could be delayed, it nonetheless represents one of Biden’s biggest moves in the economic race with China. It builds on his call last month to hike tariffs on Chinese steel and aluminum, and the formal launch of a fresh probe into China’s shipbuilding industry.

The yuan weakened on the news, while the CSI 300 Index of Chinese shares fell as much as 0.6% in early trading before paring about half of its decline. China’s Foreign Ministry and Commerce Ministry didn’t immediately reply requests for comment on Friday morning local time.

US set to target electric vehicles, reject across-board hikes
Action comes after multi-year review of Trump-era duties

President Joe Biden’s administration is poised to unveil a sweeping decision on China tariffs as soon as next week, one that’s expected to target key strategic sectors while rejecting the across-the-board hikes sought by Donald Trump. This move comes after a review of so-called Section 301 tariffs that were first put into place under Trump starting in 2018. Here are the key points:

Focus on Strategic Sectors: The new tariffs will primarily focus on industries including electric vehicles (EVs), batteries, and solar cells. These sectors are critical for both China and the global economy, and the tariffs aim to address concerns related to China’s economic practices and industrial overcapacity.
Maintaining Existing Levies: While the Biden administration will introduce new tariffs, existing levies will largely be maintained. This approach allows for targeted actions without causing widespread disruptions in trade relations.
Economic Race with China: The decision represents one of Biden’s significant moves in the ongoing economic race with China. It builds on his previous call to hike tariffs on Chinese steel and aluminum and the formal launch of a fresh probe into China’s shipbuilding industry.
Impact on Investors and Companies: Investors may pause on stocks that are potentially exposed to these tariffs. Many green-tech brands, such as battery giant Contemporary Amperex Technology Co., have already limited their US exposure. However, China’s world-leading EV companies are mostly locked out of the American market due to auto tariffs, and its solar companies often export to the US from third countries to avoid curbs.
Competition, Not Conflict: Biden emphasizes that he is not looking for a fight with China but rather fair competition. The tariffs are part of the broader strategy to address China’s economic practices and maintain a level playing field.
Election Rematch: Both Biden and his challenger, former President Donald Trump, are positioning themselves as tough on China as they head toward an election rematch in November.

In summary, the upcoming tariffs signal the Biden administration’s commitment to addressing economic challenges posed by China while avoiding a blanket approach. The impact on specific sectors and companies will be closely watched, and the decision reflects the ongoing complexities of US-China relations. Stay tuned for the official announcement next week.

Here are some frequently asked questions related to the topic of tariffs on China EVs and strategic sectors:

What are tariffs?
- Tariffs are taxes or duties imposed on imported goods by a country’s government. They are designed to protect domestic industries, regulate trade, and generate revenue for the government.
Why is President Biden imposing tariffs on China?
- President Joe Biden’s administration aims to address concerns related to China’s economic practices, including issues like intellectual property theft, unfair trade practices, and industrial overcapacity. The tariffs are part of a broader strategy to maintain fair competition and level the playing field.
Which sectors will be affected by the new tariffs?
- The new tariffs are expected to target key strategic sectors, including electric vehicles (EVs), batteries, and solar cells. These industries are critical for both China and the global economy.
How will these tariffs impact investors and companies?
- Investors may be cautious about stocks exposed to these tariffs. Green-tech companies, such as battery manufacturers, may limit their exposure to the US market. However, China’s leading EV companies are already restricted due to existing auto tariffs, and solar companies often export to the US from third countries to avoid curbs.
Is this a conflict with China?
- President Biden emphasizes that he is not seeking a fight with China but rather fair competition. The tariffs are part of a strategic approach to address economic challenges posed by China.
What’s the election connection?
- Both Biden and his challenger, former President Donald Trump, position themselves as tough on China as they head toward an election rematch in November.