Biden Announces Tariffs on Chinese EVs, Solar Panels

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Facts

• US Pres. Joe Biden on Tuesday announced a quadrupling of tariffs on Chinese electric vehicle (EV) imports this year, increasing them from 25% to 100%. Tariffs for lithium batteries for EVs will also jump from 7.5% to 25%, with all lithium batteries set to be included by 2026.¹
• The new tariffs also include an increase on aluminum and steel products from 7.5% to 25%, solar panel tariffs from 25% to 50%, and a new 25% tariff on shipping cranes. Roughly $18B of Chinese goods are estimated to be included.²
• After previously criticizing former Pres. Donald Trump's tariffs on Chinese goods during the 2020 campaign, Biden announced he would also retain the tariffs on over $300B of PRC products passed during the Trump administration.³
• White House Economic Council Director Lael Brainard said the administration will also continue investing in domestic EVs and green energy, adding that he hopes it will help 'communities in Michigan and Pennsylvania.'⁴
• Over the weekend, Trump told a crowd in New Jersey he 'will put a 200% tax on every car that comes in from those plants' — referring to Chinese EVs manufactured in Mexico.²
• Although it's unknown how China may respond, Beijing previously retaliated against Trump's tariffs with tariffs on $101.4B of US exports, which was estimated to impact 294K American jobs.⁵

Sources: ¹Forbes, ²wsj.com, ³New York Times, ⁴Daily Wire and ⁵CNN.

Narratives

• Anti-China narrative, as provided by United States Trade Representative. The White House cannot stand by and watch China overtly steal its citizens' inventions and profits. The US made an offer to China for fair trade but was rebuffed. These tariffs are the only way to prevent further disregard of global trade norms and intellectual property rights by Beijing.
• Pro-China narrative, as provided by Global Times. These tariffs are just posturing by an administration trying to look tough on China in an election year. They'll fail on two fronts — they won't hurt China because EV exports to the US represent less than 0.1% of its exports, and they also won't help the US because the American economy gave up on manufacturing a long time ago.

Predictions