The first group of China-made products that the US Biden administration targets will see their tariffs rise on August 1, 2024, according to an announcement from the Office of the US Trade Representative (USTR) on Wednesday. Some machinery for America's domestic manufacturing and solar production may be excluded temporarily.
US President Joe Biden disclosed on May 14 that the US will raise levies on an array of goods imported from China, including EVs, lithium-ion batteries, semiconductors, solar products, steel, and some medical supplies.
Tariffs on Chinese EVs were hiked from 25% to 100%, while those on solar cells were raised from 25% to 50%. Biden said the move was strategic and targeted.
The USTR said on May 22 that it is proposing that the tariff increases in 2024 become effective on August 1 and those that will rise in 2025 and 2026 be effective on January 1 of the corresponding year.
| Lists of revised US tariffs on Chinese imports and their CIF import value | |||||
Item | Tariff increased to (%) | Effective year | 2021 import value (US$m) | 2022 import value (US$m) | 2023 import Value (US$m) |
Battery parts (non-lithium-ion batteries) | 25 | 2024 | 40.38 | 51.32 | 6.61 |
EVs | 100 | 262.22 | 447.61 | 396.72 | |
Lithium-ion EV batteries | 25 | 3,912.71 | 7,498.42 | 10,910.66 | |
Other critical minerals | 25 | 256.96 | 290.54 | 237.5 | |
Ship-to-shore cranes | 25 | 214.65 | 70.18 | 48.24 | |
Solar cells (whether or not assembled into modules) | 50 | 0 | 34.81 | 12.23 | |
Steel and aluminum products | 25 | 1,377.36 | 2,178.69 | 1,329.32 | |
Facemasks | 25 | 331.91 | 71.84 | 7.9 | |
Syringes and needles | 50 | 473.25 | 285.74 | 209.92 | |
Semiconductors | 50 | 2025 | 1,666.67 | 2,440.31 | 1754.23 |
Lithium-ion non-EV batteries | 25 | 2026 | 521.48 | 1,719.15 | 2,306.65 |
Natural graphite | 25 | 34.72 | 145.23 | 113.26 | |
Permanent magnets | 25 | 370.65 | 513.84 | 438.43 | |
Medical gloves | 25 | 0 | 540.85 | 418.43 | |
Source: USITC, compiled by DIGITIMES Asia, May 2024
The US International Trade Commission's (USITC) data showed the country's growing dependence on China's batteries in recent years. Lithium-ion EV batteries that the US imported from China in 2023 held about US$10.09 billion of the Cost, Insurance, and Freight (CIF) value. This number represented a 45.5% growth from 2022 and was the highest among the goods the Biden administration currently targets.
The CIF import value of Chinese non-EV-used lithium-ion batteries was US$2.3 billion in 2023, a 34% growth from the previous year, according to USITC's data. China-made semiconductors' import value was over US$1.7 billion last year, compared to US$2.4 billion in 2022.
According to the USTR, when requested, particular machinery used in US domestic manufacturing could be excluded from the new tariffs temporarily. The agency also suggested granting 10 temporary exclusions for certain solar manufacturing equipment. The public can provide their comments on the measures until June 28.
Tesla reportedly to use components produced outside China, Taiwan
US increasing tariffs on Chinese goods could further intensify the geopolitical tension. Global companies have taken different strategies to diversify risks.
Automotive supply chain sources told Nikkei Asia that Tesla has asked its suppliers to manufacture components outside China and Taiwan. The region has seen tension rise as China just announced "punishment" military drills around Taiwan on May 23.
Tesla has requested suppliers, including those that make PCBs and displays, to offer products produced out of China and Taiwan as early as 2025, Nikkei Asia reported. A supplier told the news outlet that it was increasing production capacity in Thailand due to Tesla's call.
