White House Unveils Sizeable Tariff Hikes On Certain Chinese Goods

(MNI) London - It has been widely trailed that US President Joe Biden is set to lay out today the latest set of sweeping tariffs on a number of Chinese imports in an effort to support US manufacturing and burnish his hawkish credentials in an election year. Goods set to be targeted with new or increased levies include steel, aluminium, electric vehicles, semiconductors, batteries, solar cells, critical minerals, port cranes and medical products.

• Bloomberg reportsthat "The changes are staggered to take effect from 2024 to 2026, and are more targeted than the 60% flat tariff Trump has proposed. The biggest jump is for EVs, with the tariff rate quadrupling, while other imports are seeing levies doubled or being imposed for the first time."
• There remains the risk that China retaliates with its own tariffs, potentially sparking a tit-for-tat trade war. US Treasury Secretary Janet Yellen stated on 13 May that "Hopefully we will not see a significant Chinese response - but that's always a possibility."
• US Trade Representative Katherine Tai has issued a statement confirming the various rates of tariff. The statement says that "further action [is required] to encourage the elimination of China’s unfair technology transfer-related policies and practices that continue to burden U.S. commerce".
• Political relations had been seen to be improving following the meeting between Biden and President Xi Jinping in late 2023. However, the political realities of running a presidential election campaign against China uber-hawk Donald Trump, combined with Biden's close relations with organised labour imbuing a protectionist streak, could damage trade links further.

Chart 1. Tarrif Rate Changes on Chinese Imports by Product, %