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Biden sharply hikes US tariffs on billions in Chinese chips, cars
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Biden sharply hikes US tariffs on billions in Chinese chips, cars
May 14, 2024 2:58 AM

WASHINGTON, May 14 (Reuters) - U.S. President Joe Biden

on Tuesday unveiled a bundle of steep tariff increases on an

array of Chinese imports including electric vehicles, computer

chips and medical products, risking an election-year standoff

with Beijing in a bid to woo voters who give his economic

policies low marks.

Biden will keep tariffs put in place by his Republican

predecessor Donald Trump while ratcheting up others, the White

House said in a statement citing "unacceptable risks" to U.S.

"economic security" posed by what it considers unfair Chinese

practices that are flooding global markets with cheap goods.

The new measures impact $18 billion in Chinese imported

goods including steel and aluminum, semiconductors, batteries,

critical minerals, solar cells and cranes, the White House said.

The announcement confirmed earlier Reuters reporting.

The United States imported $427 billion in goods from China

in 2023 and exported $148 billion to the world's No. 2 economy,

according to the U.S. Census Bureau, a trade gap that has

persisted for decades and become an ever more sensitive subject

in Washington.

"China's using the same playbook it has before to power its

own growth at the expense of others by continuing to invest,

despite excess Chinese capacity and flooding global markets with

exports that are underpriced due to unfair practices," White

House National Economic Adviser Lael Brainard told reporters on

a conference call.

Even as Biden's steps fell in line with Trump's premise that

tougher trade measures are warranted, the Democrat took aim at

his opponent in November's election.

The White House said Trump's 2020 trade deal with China did

not increase American exports or boost American manufacturing

jobs, and it said the 10% across-the-board tariffs on goods from

all points of origin that Trump has proposed would frustrate

U.S. allies and raise prices. Trump has floated tariffs of 60%

or higher on all Chinese goods.

Administration officials said their measures are "carefully

targeted," combined with domestic investment, plotted with close

allies and unlikely to worsen a bout of inflation that has

already angered U.S. voters and imperiled Biden's re-election

bid. They also downplayed the risk of retaliation from Beijing.

Biden has struggled to convince voters of the efficacy of

his economic policies despite a backdrop of low unemployment and

above-trend economic growth. A Reuters/Ipsos poll last month

showed Trump had a 7 percentage-point edge over Biden on the

economy.

FREE TRADE NO MORE

Analysts have warned that a trade tiff could raise costs for

EVs overall, hurting Biden's climate goals and his aim to create

manufacturing jobs.

Biden has said he wants to win this era of competition with

China but not to launch a trade war that could hurt the mutually

dependent economies. He has worked in recent months to ease

tensions in one-on-one talks with Chinese President Xi Jinping.

Both 2024 U.S. presidential candidates have sharply departed

from the free-trade consensus that once reigned in Washington, a

period capped by China's joining the World Trade Organization in

2001.

China has said the tariffs are counterproductive and risk

inflaming tensions. Trump's broader imposition of tariffs during

his 2017-2021 presidency kicked off a tariff war with China.

As part of the long-awaited tariff update, Biden will

increase tariffs this year under Section 301 of the Trade Act of

1974 from 25% to 100% on EVs, from 7.5% to 25% on lithium-ion EV

batteries and other battery parts and from 25% to 50% on

photovoltaic cells used to make solar panels. "Certain" critical

minerals will have their tariffs raised from nothing to 25%.

The tariffs on ship-to-shore cranes will rise to 25% from

zero, those on syringes and needles will rise to 50% from

nothing now and some personal protective equipment (PPE) used in

medical facilities will rise to 25% from as little as 0% now.

Shortages in PPE made largely in China hampered the United

States' COVID-19 response.

More tariffs will follow in 2025 and 2026 on semiconductors,

whose tariff rate will double to 50%, as well as lithium-ion

batteries that are not used in elective vehicles, graphite and

permanent magnets as well as rubber medical and surgical gloves.

A step Biden previously announced to raise tariffs on some

steel and aluminum products will take effect this year, the

White House said.

A number of lawmakers have called for massive hikes on

Chinese vehicle tariffs. There are relatively few Chinese-made

light-duty vehicles being imported now. Senate Banking Committee

Chairman Sherrod Brown wants the Biden administration to ban

Chinese EVs outright, over concerns they pose risks to

Americans' personal data.

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