So the Chinese EVs scheduled
to be made in Mexico that are $12,000 will have US a 102.5% tariff added to the
cost and will then cost $24,300, but will also need to comply with US auto
regulations and that will add to the price. Solar cells and Computer Chips made
in China will have the US tariff increased from 25% to 50%.
I don’t think we buy steel,
aluminum and medical equipment from China.
WASHINGTON
(AP) — The Biden administration announced plans
to slap new tariffs on Chinese
electric vehicles, advanced batteries, solar cells, steel, aluminum and medical
equipment — an election year move that’s increasing friction between the
world’s two largest economies.
The tariffs come in the
middle of a heated campaign between President Joe Biden and his Republican predecessor, Donald Trump, in which both candidates are vying to show who’s tougher on
China.
The Chinese government
was quick to push back, issuing a statement Tuesday that the tariffs “will
seriously affect the atmosphere of bilateral cooperation.” The foreign ministry
used the word “bullying.”
The tariffs are unlikely
to have much of an inflationary impact because of how they’re structured.
Administration officials said they think the tariffs won’t escalate tensions
with China, yet they expect China will explore ways to respond to the new taxes
on its products. It’s uncertain what the long-term impact on prices could be if
the tariffs contribute to a wider trade dispute.
The tariffs are to be
phased in over the next three years, with those that take effect in 2024
covering EVs, solar cells, syringes, needles, steel and aluminum and more.
There are currently very few EVs from China in the U.S., but officials worry
low-priced models made possible by Chinese government subsidies could soon
start flooding the U.S. market.
Chinese firms can sell EVs for as little
as $12,000. Their solar cell
plants and steel and aluminum mills have enough capacity to meet much of the
world’s demand, with Chinese officials arguing their production keeps prices
low and would aid a transition to the green economy.
Lael Brainard, director
of the White House National Economic Council, said the tariffs will raise the
cost of select Chinese goods and help thwart Beijing’s efforts to dominate the
market for emerging technologies in ways that pose risks to U.S. national
security and economic stability.
“China
is simply too big to play by its own rules,” Brainard told reporters on a
Monday call previewing the announcement.
Administration
officials have stressed the decision on tariffs was made independently of
November’s presidential election. But Brainard noted in her remarks the tariffs
would help workers in Pennsylvania and Michigan, two of the battleground states
that will decide who wins the election. But China’s commerce ministry said in a
statement that the tariffs were “typical political manipulation” as it
expressed its “strong dissatisfaction” and pledged to “take resolute measures
to defend its rights and interests.”
Under
the findings of a four-year review on trade with China, the tax rate on
imported Chinese EVs will rise to 102.5% this year, up from total levels of
27.5%. The review was undertaken under Section 301 of the Trade Act of 1974,
which allows the government to retaliate against trade practices deemed unfair
or in violation of global standards.
Under
the 301 guidelines, the tariff rate is to double to 50% on solar cell imports
this year. Tariffs on certain Chinese steel and aluminum products will climb to
25% this year. Computer chip tariffs will double to 50% by 2025.
For lithium-ion EV batteries,
tariffs will rise from 7.5% to 25% this year. But for non-EV batteries of the
same type, the tariff increase will be implemented in 2026. There are also
higher tariffs on ship-to-shore cranes, critical minerals and medical products.
The new tariffs, at least initially,
are largely symbolic since they will apply to only about $18 billion in
imports. A new analysis by Oxford Economics estimates the tariffs will have a
barely noticeable impact on inflation by pushing up inflation by just 0.01%.
The auto industry is still trying to
assess the impact of the tariffs. But at present, it appears they could be
assessed on only two Chinese-made vehicles, the Polestar 2 luxury EV and
potentially Volvo’s S90 luxury gas-electric hybrid midsize sedan.
“We’re still reviewing the tariffs
to understand exactly what’s affected and how,” said Russell Datz, spokesman
for Volvo, a Swedish brand now under China’s Geely group. A message was left
seeking comment from Polestar, which also falls under Geely.
The
Chinese foreign ministry spokesperson, Wang Wenbin, said the U.S. is trampling
on the principles of a market economy and international economic and trade
rules.“It’s
a naked act of bullying,” Wang said.
The
Chinese economy has been slowed by the collapse of the country’s real estate
market and past coronavirus pandemic lockdowns, prompting Chinese President Xi
Jinping to try to jumpstart growth by ramping up production of EVs and other
products, making more than the Chinese market can absorb.
This
strategy further exacerbates tensions with a U.S. government that claims it’s
determined to strengthen its own manufacturing to compete with China, yet avoid
a larger conflict.
“China’s
factory-led recovery and weak consumption growth, which are translating into
excess capacity and an aggressive search for foreign markets, in tandem with
the looming U.S. election season add up to a perfect recipe for escalating U.S.
trade fractions with China,’’ said Eswar Prasad, professor of trade policy at
Cornell University.
The
Europeans are worried, too. The EU launched an investigation last fall into
Chinese subsidies and could impose an import tax on Chinese EVs.
After
Xi’s visit to France last week, European Commission President Ursula von der
Leyen warned that government-subsidized Chinese EVs and steel “are flooding the
European market” and said, “The world cannot absorb China’s surplus
production.’’
Biden’s
Democratic administration views China, with its subsidies of manufacturing, as
trying to globally control the EV and clean-energy sectors, whereas the
administration says its own industrial support is geared toward ensuring
domestic supplies to help meet U.S. demand.
“We
do not seek to have global domination of manufacturing in these sectors, but we
believe because these are strategic industries and for the sake of resilience
of our supply chains, that we want to make sure that we have healthy and active
firms,” Treasury Secretary Janet Yellen said.
The
tensions go far beyond a trade dispute to deeper questions about who leads the
world economy as a seemingly indispensable nation. China’s policies could make
the world more dependent on its factories, possibly giving it greater leverage
in geopolitics. At the same time, the United States says it’s seeking for
countries to operate by the same standards so competition can be fair.
China
maintains the tariffs are in violation of the global trade rules the United
States originally helped establish through the World Trade Organization. It
accuses the U.S. of continuing to politicize trade issues and on Friday said
the new tariffs compound the problems caused by tariffs the Trump
administration previously put on Chinese goods, which Biden has kept.
Those
issues are at the heart of November’s presidential election, with a bitterly
divided electorate seemingly united by the idea of getting tough with China.
Biden and Trump have overlapping but different strategies.
Biden
sees targeted tariffs as needed to defend key industries and workers, while
Trump has threatened broad 10% tariffs against all imports from rivals and
allies alike.
Biden
has staked his presidential legacy on the U.S. pulling ahead of China with its
own government investments in factories to make EVs, computer chips and other
advanced technologies. “We’ve created $866 billion in private-sector investment
nationwide — almost a trillion dollars — historic amounts in such a short
time,” Biden said last week in Wisconsin. “And that’s literally creating
hundreds of thousands of jobs.”
Trump
tells his supporters America is falling further behind China by not betting on
oil to keep powering the economy, despite its climate change risks. The
ex-president may believe tariffs can change Chinese behavior, but he believes
the U.S. will be reliant on China for EV components and solar cells.
“Joe
Biden’s economic plan is to make China rich and America poor,” he said at a
rally this month in Wisconsin.
https://apnews.com/article/biden-china-tariffs-electric-vehicles-evs-solar-2024ba735c47e04a50898a88425c5e2c
Comments
It appears that China will not
be sending any more money to the Biden family. US consumers will not buy US
EVs. New car prices at GM and Ford are too high and not many US consumers will
buy these either. If Cuba can restore 50 year old US used cars and trucks, so
can we.
From the invention of the
“horseless carriage” in the 1880s to The Model T in the 1920s, it took 40 years
to introduce the automobile to prominence. The Model T truck gave farmers a
vehicle they could use to get their goods to market. Horses were not banned,
but continued to be used in rural areas.
From the 1920s to the 1930s
more citizens bought the Model Ts and other combustion engine cars. After 1945,
the automobile became the preferred mode of transport for families. Trucks
joined railroads and barges to transport goods to market.
EVs don’t operate in the cold,
charging stations are not available, the life of EV batteries is about 10 years
and they are too expensive. If prices ease and battery life-span improves, EVs
might find a nitch, but it could take decades. We prefer hybrids with a
battery-life of 20 to 30 years.
Norb Leahy, Dunwoody GA Tea
Party Leader
