New spark in the constant friction between the United States and China. The White House has announced a drastic escalation in tariffs on certain Chinese products, including a 100% tax, four times higher than before, for electric vehicles. In total, the new measures will be implemented over the next three years and will affect almost 18 billion dollars of goods from the rival country, from medical products to semiconductors, including port cranes, batteries, critical minerals, photovoltaic panels. , aluminum and iron.
The measure, to which Beijing has already reacted with fury and which has warned that it will have an impact on the bilateral relationship, comes in the middle of the electoral campaign for the November elections. Biden is trailing his rival Donald Trump in polls, in which potential voters harshly criticize his management of the economy. Both are trying to present themselves as the toughest leader in the face of the rival country: in statements before entering the trial in New York, the Republican candidate has called for imposing more taxes on other vehicles and products. “They have to do it on much more than electric vehicles,” he stressed.
The Democratic president assures that he wants to win in the era of competition with China but does not want a trade war with the Asian giant, something that would harm both countries. In November of last year he met outside San Francisco with his Chinese counterpart, Xi Jinping, to try to reduce tensions between the two countries and find a way to manage differences.
“China’s unfair trade practices around technology transfer, intellectual property and innovation threaten American companies and workers. “China is also flooding global markets with artificially low-priced exports,” the White House alleges in a statement announcing the new tariffs.
The Government of President Joe Biden maintains that “China’s forced transfers of technology and intellectual property have contributed to its control of 70, 80 and even 90% of the production of key elements necessary for our technologies, infrastructure, energy and health, creating unacceptable risks to US logistics chains and economic security.”
The White House believes that the new taxes are calibrated enough to avoid a spike in inflation, the big problem that has plagued the US economy during Biden’s term. But he also admits that it is possible that Beijing will take reciprocal measures.
So far, the United States imports few Chinese electric vehicles, although economic officials fear that this trend could take a 180-degree turn given the low prices of these cars, which benefit from generous subsidies from the Chinese government. But analysts warn that if a new trade war breaks out between the two great powers, the prices of electric vehicles in general could rise, something that would affect the Biden Administration’s objectives for job creation and climate change.
“China uses its same previous script to boost its own growth at the expense of others, by continuing to invest despite excess Chinese production capacity and flooding global markets with exports that are too cheap due to unfair practices,” said the economic advisor of the White House, Lael Brainard, in a telephone press conference.
In 2023, the United States imported around $427 billion in Chinese products and exported around $148 billion to the Asian giant. The difference in this trade balance has for years been a source of friction between the two global giants: in 2018, the then Donald Trump Administration unleashed a trade war between the two by raising tariffs against $250 billion in Chinese products.
The conflict was settled with a partial agreement in 2020, when the covid pandemic broke out, which never finished developing. The Biden Administration has maintained those taxes.
In a statement, Treasury Secretary Janet Yellen specifically referred to Chinese overcapacity and “the impact on American communities of waves of artificially cheap Chinese goods in the past, and we will not tolerate it again.” The head of the US economy maintains that these concerns “are widely shared by our partners in advanced economies and emerging markets.”
The measures announced this Tuesday “are not motivated by any anti-China policy,” says Yellen, “but by the desire to prevent harmful economic disruptions caused by unfair economic practices.”
The US Foreign Trade Representative, Katherine Tai, has assured after this Tuesday’s announcement that the new tariffs are justified because China continues to obtain US intellectual property and in some cases has perpetrated “more aggressive” cyberattacks aimed at US technology.
From China they affirm that the taxes “will seriously affect bilateral cooperation”
In Beijing, the Ministry of Commerce has denounced that the new US measures “violate President Biden’s commitment to ‘not seek to impede and contain China’s development’ and ‘not to seek decoupling and sever ties’ with China.” The levies “will seriously affect the climate of bilateral cooperation,” the body warns in a statement.
The reactions from the sector have not been long in coming. At a table with journalists, the CEO of Stellantis, Carlos Tavares, considered that the imposition of tariffs is not “a long-term solution”: “We do not believe that this is a long-term solution. Why didn’t we bring electric vehicles to US markets? For a very simple reason. “There is a very limited supply of Chinese cars in the American markets, so it is not a priority for us, because there is no real competition, but there are many in Europe, because it is seen that Europe has a very different approach to this problem,” he said. assured Tavares, cited by Europa Press.
The European Commission (EC) stated this Tuesday that it will study the new tariffs that the United States has decided to impose on imports of electric vehicles from China, as well as their possible impact on the European Union, indicates Efe. The community spokesperson for Commerce, Olof Gill, indicated during the EC’s daily press conference that they will not comment on the use by the United States of these tariffs or the conclusions that the US authorities have reached in this regard.
Late Tuesday afternoon in China (early morning on the east coast of the United States), the Asian giant’s Ministry of Commerce published a statement in which it “firmly opposes” the new round of tariffs announced. by Washington and in which he assures that Beijing has presented a “strong protest.” Likewise, the document advances that “China will take firm measures to defend its own interests.”
“This politicization and instrumentalization of economic and trade issues is a typical example of political manipulation,” they criticize from the trade portfolio, and take the opportunity to remember that the World Trade Organization (WTO) has ruled that the tariffs imposed by the administration of the former president Donald Trump to China in 2018 and 2019 are excessive and violate international laws. “The WTO determined that Section 301 tariffs violate WTO rules. However, instead of correcting this error, the United States has persisted in its actions,” reads the text issued by the Chinese authorities.
“Section 301 tax increase contradicts the president’s commitment [Joe] Biden not to seek to suppress China’s development or to decouple and break the chains [de suministro] with China,” the statement continues. “This measure also goes against the consensus reached by the leaders of both countries and will seriously affect the environment of bilateral cooperation,” they say from Commerce.
The Ministry of Foreign Affairs had already reported hours before that Beijing would “take actions aimed at safeguarding its rights and legitimate interests.” “China has systematically opposed the unilateral imposition of tariffs that violate WTO rules,” said foreign ministry spokesman Wang Wenbin, in a routine appearance.
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