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US-China trade relationship exacerbates as Biden raises tariffs on Chinese EVs, solar cells, semiconductors

Peng Chen, DIGITIMES Asia, Taipei 0

US President Joe Biden announces new tariffs on Chinese goods. Credit: AFP

The US government announced the long-waited tariff revision on an array of China-made products on May 14.

Tariffs on Chinese EVs were hiked from 25% to 100%, while those on solar cells were raised from 25% to 50%. China's Ministry of Commerce immediately said the move substantially impacted the collaboration between the two countries, vowing to take resolute measures to defend China's interests.

Lists of revised US tariffs on Chinese imports

Item

Tariff increased to (%)

Effective year

Battery parts (non-lithium-ion batteries)

25

2024

EVs

100

Lithium-ion EV batteries

25

Other critical minerals

25

Ship-to-shore cranes

25

Solar cells (whether or not assembled into modules)

50

Steel and aluminum products

25

Facemasks

25

Syringes and needles

50

Semiconductors

50

2025

Lithium-ion non-EV batteries

25

2026

Natural graphite

25

Permanent magnets

25

Medical gloves

25

Source: The White House, compiled by DIGITIMES Asia, May 2024

US President Joe Biden's new tariffs on China-made products are based on former President Donald Trump's policy. The most significant tariff increase was 100% on Chinese EV. Biden said at a press conference on Tuesday that the US will not let China flood its market and make it impossible for American automotive manufacturers to compete fairly.

According to Reuters, tariffs on EV batteries and other battery parts were increased from 7.5% to 25%. Solar cells were targeted with a 25% tariff. Biden said Chinese solar manufacturers are driving competitors in Europe out of business.

"We won't let that happen here in America," he added. A 50% tariff on China-made semiconductors will take effect in 2025. A 25% tariff on natural graphite, permanent magnets, and medical gloves will follow in 2026.

The White House said the new measures will affect US$18 billion of goods imported from China to the US. However, they are less likely to affect Chinese EVs on a large scale.

China-based Gasgoo reported that the China Passenger Car Association (CPCA) data showed that Geely was the only Chinese carmaker that exported vehicles to the US in the first quarter of 2024. The company shipped over 2,200 cars to America.

Other vehicles exported to the US were sold mostly under US brands, including General Motors' Buick.

China's commerce ministry said on Tuesday that the US is politicizing trade issues, and the Chinese government is strongly dissatisfied with this. The ministry also said the US new tariffs violated Biden's vow not to decouple from China. The US government should cancel the additional tariffs on Chinese goods instantly. China will take measures to protect its interests, the ministry added.

In his speech on May 14, Biden said these tariffs are strategic and targeted. He also said the Chinese government has poured state money into Chinese companies focusing on steel and aluminum, semiconductors, EVs, and solar panels for years.

Biden accused China of "cheating" by stealing through cyber espionage and other means. He said he wants fair competition with China, not conflict.