China hailed as an exporting superpower is under Biden’s microscope who is determined to curb it from its power and republish Trump’s strict trade policy measures
Joe Biden is expected to satisfy his administration’s long-standing will of curbing Chinese products in the country. In an impending announcement, which Biden is expected to release on Tuesday, his close associates suspect some heavy duty tariffs to be levied on Chinese EVs, semiconductors, batteries, solar cells, steel, and aluminum. The tariff on EVs will rise to 100%, quadrupling the current tariff of 25%, according to source familiar with the tariffs.
China that is often hailed as an exporting powerhouse is routinely criticized for overwhelming global consumer markets with Chinese products. This is a latest policy bid by the Biden administration to outperform China’s manufacturing potential and keep it from undercutting U.S. companies and threatening U.S manufacturing jobs.
The tariffs would be levied on set number of industries, particularly those that are leading the markets into future. Though Chinese EVs are not a big part of the EV market in the U.S., but China’s exports are rapidly increasing, up 50% over the past two years. China is ramping its investments in clean energy industry, preparing to give a tough fight to other global economies.
Biden “restructures” his trade policy ahead of China’s EV dominance
There is no surprise of the significance that EV industry holds in current market scenario. The climate anthem, that took years of dialogue and summits by world leaders, and policymakers to compose and hum, had transformed every bit of what makes a business “successful”, and China is determined to dominate that market. But wait.. will the world allow it? Obviously not. Biden administration has repeatedly culminated policy strategies, even to an extent of sending his own delegate to renegotiate economic terms with Beijing.
“The previous administration was content to sit on the sidelines and let China take all these jobs, but I won’t let that happen. I’m going back to that – We built in America, and we buy American”, debriefed Biden, during his re-election bid in January. His new tariffs to dramatically hike prices of Chinese EV could ease some pressure off American automakers, and the United Auto Workers, which endorsed Biden’s efforts to transition the economy to EVs, and his promise to not leave U.S. automakers behind.
China’s EV market is growing prolifically. China is producing EV cars that cost a fraction to those made by American automakers. BYD, the world’s largest EV manufacturer headquartered in mainland China, rolled out a new car – Seagull, which received glowing reviews from stakeholders as well as the press. The car was described a magnetic outcome of China’s ingenious craftsmanship, cutting cost by thrice to U.S. made electric vehicles. “It sells for around $12,000 in China, with a shorter version that’s under $10,000.
How hard will U.S.’ trade policy hit China’s economy?
China’s overall trade relations with United States has plummeted over these past few years. In a recent statement released by concerned authorities, India has taken over U.S. and has become China’s biggest trading partner in FY24. But where EV market is concerned, China exports handful of its cars to U.S. In the first quarter, Geely, was the only Chinese automaker to export to United States with 2,217 cars, according to data from the China Passenger Car Association.
China’s solar industry has been subjected to U.S. tariff for over a decade. Over 80% of solar panel are now manufactured in China which costs 60% cheaper than in the U.S. Last year China exported $3.35 million solar cells to U.S., less than 0.01% of China’s total exports. Outbound shipments of completed solar panels to the US. stood at $13.15 million in 2023, only 0.03% of total China’s exports. So far the latest trade policy initiative by Biden has not stripped off China’s from its economic powers.
China which has mindfully opened its economy to new trading partners especially Russia ahead of its war with Ukraine, has yielded enormous power to China’s overall exporting capabilities. The exact implications of the new tariff policy restrictions by U.S. on Chinese products have not yet been commented upon by either of sides.
