Biden Ramps Up Tariffs on Chinese EVs & Chips, Sparking Trade Tensions

US President Joe Biden has announced substantial increases in taxes on Chinese-made electric vehicles and semiconductors, accusing China of "cheating instead of competing" as he gears up for his second term in office. The move has drawn criticism from Beijing and signals a tougher stance against the Chinese government ahead of the upcoming presidential election, where Biden will face off against former US President Donald Trump.

The new tariffs, which will take effect next year, will see taxes rise to 100% for electric vehicles and up to 50% for semiconductors, impacting $18 billion worth of Chinese imports, including batteries, minerals, and medical products. Biden signed an order implementing the tariffs following a speech in which he declared, "We're not going to let China flood our market, making it impossible for American auto manufacturers to compete fairly."

This marks a shift in Biden's position, as he had previously criticised the tariffs imposed by the Trump administration during the US-China trade war. The Biden administration has now opted to retain and amplify these policies, with the president accusing China of subsidising critical industries, leading to an oversupply of cheap goods.

Trump, Biden's opponent in the upcoming election, has accused the current administration of acting too slowly, claiming that Biden's inaction has harmed the US car industry by prioritising electric vehicles. The Biden administration has, however, invested heavily in semiconductors and green initiatives.

In response to the increased tariffs, the Chinese commerce ministry has warned of potential damage to bilateral cooperation and threatened to take "necessary measures."

In addition to the tariffs on electric vehicles and semiconductors, the US is also tripling tariffs on some steel and aluminium products, as well as lithium-ion batteries and parts. Taxes on natural graphite and other critical minerals will increase by 25%, while those on solar cells will double to 50%. Some of these hikes will be introduced in a phased manner to allow for domestic adjustments.

As the US and China navigate this latest development in their complex economic relationship, the global market braces for the potential impact of these increased tariffs on trade and international cooperation.