Washington, U.S.A.

U. S. President Joe Biden is getting ready to announce a new package of tariffs on Chinese imports, which will be concentrated in strategic industries, such as electric vehicles (EVs), according to media reports.

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Tariffs on key sectors

The impending announcement, expected to be made public next Tuesday, will uphold the existing tariffs on numerous Chinese goods implemented by former President Donald Trump. However, it will also introduce new tariffs on semiconductors, solar equipment, and EVs. In addition, the Chinese-made medical supplies such as syringes and personal protective equipment are going to be subject to more tariffs.

Strategic competitiveness and national security

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The Biden administration's revisions to the "Section 301 tariffs" address the critical sectors that matter for strategic competitiveness and national security according to sources familiar with the matter.

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Push for Higher EV tariffs

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Lawmakers have been pushing for substantial increases in tariffs on imported Chinese light-duty vehicles, even though this segment of vehicles from China only makes up a small part of the current volume of imported vehicles. In the new scheme, the existing tariffs on Chinese EVs will become four times higher than the previous tariffs. The Senate Banking Committee Chairman Sherrod Brown calls for a permanent structuring of the plan due to data security risks.

Delays and internal discussions

The office of the U. S. Trade Representative has already given recommendations to the White House but the final announcement has been delayed because of internal discussions. Some sources suggest that the announcement might not occur on Tuesday, as initially anticipated.

Contrasting approaches

Biden's approach to tariffs contrasts with Trump's proposal of blanket tariffs, which the current administration perceives as overly broad and likely to fuel inflation. Trump had advocated for tariffs of 60% or higher on all Chinese imports.

Potential retaliation and trade war concerns

The introduction of new tariffs could cause China's counter attacks, thus leading to the escalation of the already existing tensions between the two largest economies in the world. Trump's previous tariff policies initiated a trade war between the U.S. and China.

Departure from free-trade consensus

Both Biden and Trump have departed significantly from the previous free-trade consensus in Washington. Biden started a review of Trump-era policies in 2022, especially the ones that were made under Section 301 of U. S. trade law, to be more in line with a tough stance on trade with China.

Investigation and pressure on Mexico

Biden's administration has undertaken a review across several sectors, including shipbuilding, maritime, and logistics, that could provide them with leeway for more tariffs to be applied. Additionally, there have been efforts to pressure Mexico to prevent China from indirectly selling metal products to the U.S.

China has criticised the tariff measures, viewing them as counterproductive and harmful to both the U.S. and global economies.

(Inputs from Reuters)