US President Joe Biden has imposed heavy tariffs on Chinese electric vehicles, batteries, steel, solar cells, and aluminium, saying it would ensure that American workers are not held back by unfair trade practices.

These include a 100 per cent tariff on electric vehicles, a 50 per cent tariff on semiconductors, and a 25 per cent tariff each on electric vehicle batteries from China.

In his address to the nation from the Rose Garden of the White House, Biden said America can continue to buy any kind of car they want, but we’re never going to allow China to unfairly control the market for these cars. Period.

I want fair competition with China, not conflict. We are in a stronger position to win that economic competition of the 21st century against China than anyone else because we’re investing in America again, he said.

Biden alleged that for years, the Chinese government has poured state money into Chinese companies across a whole range of industries: steel and aluminium, semiconductors, electric vehicles, solar panels, and even critical health equipment, like gloves and masks.

China heavily subsidised all these products, pushing Chinese companies to produce far more than the rest of the world could absorb. Then dumping the excess products onto the market at unfairly low prices, driving other manufacturers around the world out of business, he said.

The prices are unfairly low because Chinese companies don’t need to worry about profit because the Chinese government subsidised them and subsidised them heavily. The Chinese also rely on other anti-competitive tactics, like forcing American companies to transfer their technology to do business in China, he said.

Biden said the new tariffs announced by him in key sectors of the economy are going to ensure that US workers are not held back by unfair trade practices.

American companies, he said, are investing tens of billions of dollars in electric vehicles and their batteries. Our partners around the world are making similar investments. They also want a supply chain for electric vehicles that isn’t dominated by unfair trade practices from China, he said.

Biden also slammed his predecessor Donald Trump on his China policy.

My predecessor promised to increase American exports and boost manufacturing. But he didn’t either. He failed. He signed a trade deal with China. They were supposed to buy USD 200 billion more in American goods. Instead, China imports from America barely budged, he alleged.

And now, Trump and his MAGA Republicans want across-the-board tariffs on all imports from all countries, if reelected. Well, that would drive up costs for families on an average of USD 1,500 per year each year. He simply doesn’t get it, he said.

At a White House news conference, US Trade Representative Katherine Tie said the previous administration’s trade deal with China failed to increase American exports or boost manufacturing. In fact, China’s exports in some critical sectors like EVs and batteries actually increased, Tie said.

In response, President Biden signed a memorandum directing me to increase tariffs on critical manufacturing and mining sectors, including steel and aluminium, semiconductors, electric vehicles, batteries, solar cells, and certain critical minerals, she said.

The increased tariffs are expected to cover approximately USD 18 billion of trade. The president also directed a process to request excluding certain production machinery from the tariffs to permit solar and clean manufacturers to purchase equipment while diversifying their suppliers.

Next week, she is expecting to issue a public notice that conveys the specific tariff lines, tariff rates, and timing for the proposed increases along with the details of the machinery exclusions process.

This strong action by the president is strategic. As he has said, we do not seek to constrain China’s economic development, but we will insist on fair competition and defend American workers from the PRC’s unfair practices.

Today’s direction by the president defends American workers and businesses from the PRCs artificially cheap products, whether EVs or steel or critical minerals or semiconductors, Tie said.

She also emphasised that the US continues to consult with its partners and allies who face similar threats from the Chinese unfair trade practices and are also voicing their concern with those unfair practices and taking action.

First Published: May 15 2024 | 7:59 AM IST