EXCESS CAPACITY
The latest moves impact both products already targeted by Trump tariffs, alongside additional ones.
The levies will ensure that investments in jobs, spurred by Biden’s policies, are not undercut by “underpriced exports from China”, National Economic Advisor Lael Brainard said.
The Biden administration has pumped massive funding into areas like semiconductor manufacturing and research, alongside efforts to boost green investments.
But Brainard accused Beijing of powering its growth “at the expense of others”.
“As a result of unfair practices, China’s anticipated manufacturing capacity in solar is more than double the forecasts of near term global demand,” she said.
Brainard also took aim at the Trump administration, saying it “failed to follow through” with investments, and to ensure China complied with a deal marking a truce in the trade war.
The so-called Phase One agreement “did not deliver on its promises to increase exports to China from the US, to create manufacturing jobs here in America, or to end China’s unfair practices”, she said.
“PRE-EMPTIVE STRIKE”
Hiking tariffs on Chinese EVs would be “a pre-emptive strike” given that few such cars are imported, said Paul Triolo, partner for China at Albright Stonebridge Group.
The impact from EV tariffs alone is expected to be minimal.
“It is really a signal to US automakers that the Biden administration is protecting the industry from Chinese EVs,” he told AFP.
But tariffs covering EV batteries and supply chains would be “a much bigger issue, because of the dominance of Chinese companies in the finished battery space and for critical mineral across the battery supply space”, he said.
Beijing is likely to retaliate with tariff increases of its own, Triolo said.
But he does not expect US levies alone to upset current stability in US-China ties.
Beijing is likelier to retaliate strongly if Washington takes measures seen as suppressing Chinese companies, like imposing more trade restrictions on semiconductor firms.
Treasury Secretary Janet Yellen told reporters Monday, when asked about possible tariffs: “I’m hopeful that they will see that the actions that we’re taking are targeted.”
She added in a statement that issues like overcapacity “will not be solved in a day”, and that she would continue to directly address concerns with Chinese counterparts.
