Biden government imposes tariffs on Chinese EVs and computer chips

On Tuesday, U.S. President Joe Biden disclosed a high tariff increase on an array of Chinese imports including electric vehicles, computer chips and medical products, risking an election-year standoff with Beijing, seen as a move aimed to impress voters who are notfans of his economic policies.

According to the White House, this particular measure affects $18 billion in Chinese imported goods including steel and aluminium, semiconductors, batteries, critical minerals, solar cells and cranes.

In 2023, the United States imported $427 billion in goods from China and exported $148 billion to the world's second-largest economy, as reported by the U.S. Census Bureau.

"China's using the same playbook it has before to power its own growth at the expense of others by continuing to invest, despite excess Chinese capacity and flooding global markets with exports that are underpriced due to unfair practices," White House National Economic Adviser Lael Brainard said according to local media reports.

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The White House also criticised former President Trump's 2020 trade deal with China, which did not increase American exports or boost American manufacturing jobs, instead, the 10% across-the-board tariffs on goods from all points of origin that Trump has proposed would go on to agitate U.S. allies, and make them raise prices.

Trump has floated tariffs of 60% or higher on all Chinese goods.

Administration officials said their measures are "carefully targeted," combined with domestic investment, plotted with close allies and unlikely to worsen a bout of inflation that has already angered U.S. voters and imperilled Biden's re-election bid. They also downplayed the risk of retaliation from Beijing.

Despite low unemployment and above-average economic growth, Biden has struggled to convince voters of his economic policy's effectiveness.

Analysts have warned that a trade dispute could raise costs for EVs overall, and hurt Biden's climate goals, while also affecting his aim to create manufacturing jobs.

Biden has said he wants to win this era of competition with China but not to launch a trade war that could hurt the mutually dependent economies. He has worked in recent months to ease tensions in one-on-one talks with Chinese President Xi Jinping.

(With inputs from Reuters)