Biden finalizes increases to some of Trump’s China tariffs
By Katie Lobosco, CNN
Washington (CNN) — The Biden administration said Friday that it has finalized tariff hikes on certain Chinese-made products that the president first announced in May.
The tariff rate will go up to 100% on electric vehicles, to 50% on solar cells and to 25% on electrical vehicle batteries, critical minerals, steel, aluminum, face masks and ship-to-shore cranes beginning September 27, according to the US Trade Representative’s Office.
Tariff hikes on other products, including semiconductor chips, are set to take effect over the next two years.
The administration’s increases – which impact a relatively small amount of US imports – come as Vice President Kamala Harris and former President Donald Trump have clashed over tariffs on the campaign trail. Trump is calling for sweeping new duties on all imports, while Harris has said that his proposal would raise prices on American households.
Trump implemented sweeping tariffs on about $300 billion of Chinese-made products when he was in office. President Joe Biden has kept those tariffs in place and, after the USTR finished a multiyear review earlier this year, decided to increase some of the rates on about $15 billion of Chinese imports.
The products that will now face increases are in line with Biden’s other economic policies aimed at boosting domestic manufacturing in industries including clean energy and semiconductor chips.
“Today’s finalized tariff increases will target the harmful policies and practices of the People’s Republic of China that continue to impact American workers and businesses,” US Trade Representative Katherine Tai said in a press release.
China is expected to retaliate by increasing tariffs on US-made goods.
Chinese foreign ministry spokesperson Wang Wenbin told reporters in May that China opposes “the unilateral imposition of tariffs which violate (World Trade Organization) rules, and will take all necessary actions to protect its legitimate rights.”
Also on Friday, the Biden administration announced a new effort to limit the amount of foreign goods that can come into the US tariff-free because they are valued at $800 or less.
The majority of shipments using this exemption, known as “de minimis,” are coming from China, the White House said. The administration’s change to the trade regulation will make some imports ineligible for the exemption. It will take effect after a public comment period.
Tariffs become a hot 2024 election topic
Tariffs can be politically popular, even though many economists agree they are costly tools that don’t always boost domestic industries as promised.
They are meant to raise prices of foreign-made goods as a way of protecting domestic producers. Many Democrats and Republicans agree that Beijing has long used unfair trading practices to make Chinese-made goods more competitive.
Still, there are major differences to note between Trump’s call for sweeping tariffs and the Biden administration’s more targeted approach.
If elected, Trump has said he will significantly increase the tariffs the US has on imports from all over the world. He’s called for new tariffs of up to 20% on every foreign import coming into the US. For context, the US imported $3.2 trillion worth of goods in 2022, per the latest data available.
Trump has also called for adding another tariff upward of 60% on all Chinese imports and said he would impose a “100% tariff” on countries that shift away from using the US dollar.
Trump has said that the revenue brought in by these new tariffs, which is paid by importers in the US, could be used to lower taxes and pay for child care.
Harris, who hasn’t given many details about how she would use – or not use – tariffs, has repeatedly attacked Trump’s proposal, calling it a “Trump sales tax.”
She has pointed to a study that shows Trump’s proposed tariffs would amount to about a $3,900 annual tax increase for a middle-income family, according to the Center for American Progress Action Fund, a liberal think tank.
Other studies have also said the proposed tariffs would raise prices for families, but by a smaller amount. The Urban-Brookings Tax Policy Center, for example, said the impact could be an additional $1,350 a year for middle-income households.
Impact on consumers
Study after study, including one from the federal government’s bipartisan US International Trade Commission, have found that Americans have borne almost the entire cost of Trump’s tariffs on Chinese products.
Once an importer pays for the tariff, it usually passes along some or all of the cost to the consumer.
But when it comes to the new tariff hike – from 27.5% to 100% – on electric vehicles, American consumers may not see a sudden jump in prices. That’s because the US already imports a relatively small amount of electric vehicles from China.
Since 2018, Chinese electric vehicle imports have increased from $7.2 million to $388.8 million – but were only 2% of all US electric vehicle imports, according to the US International Trade Commission.
Still, US automakers fear Chinese-made electric vehicles, which are sold for as little as $10,000, could end up flooding the US market.
“China now produces 70 percent of the world’s electric cars – jeopardizing productive investments elsewhere,” USTR wrote in its recent report.
Steel and aluminum trade groups and unions also welcomed the news after Biden first said in April he was considering a tariff hike on steel during a speech at the United Steelworkers headquarters in Pittsburgh. But some analysts say the move could have little impact on the US steel industry because China accounts for a very small percentage of US steel imports.
CNN’s Kayla Tausche contributed to this report.
This headline and story have been updated.
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