The Biden Administration is Increasing Tariffs on These Chinese Imports

By Elizabeth Brotherton-Bunch
May 14 2024 |
Graphic by Getty Images

Biden directed the U.S. Trade Representative to up the tariff rates for imports of steel, solar cells, semiconductors, electric vehicles, batteries, and more. It’s the right thing to do.

It’s official: The Biden administration has completed its long-awaited review of “Section 301” tariffs on Chinese goods, and is moving to increase rates on a number of products in critical sectors.

U.S. Trade Representative Katherine Tai will be charged with implementing the increased tariff rates, which she said in a statement are in response to “China’s unfair technology transfer-related policies and practices that continue to burden U.S. commerce and harm American workers and businesses.” The Office of the USTR also released a 193-page report diving into the findings of its required review of the tariffs, which were originally put into place under the Trump administration.

“Enhancing the Section 301 tariffs to counter China’s unfair trade practices is absolutely the right thing to do for America’s future,” Alliance for American Manufacturing President Scott Paul said in a statement.

“While the nature of China’s unfair trade practices shifts from time to time, the goals are always clear: to disrupt global norms, weaken American economic security, and seek growth at the expense of others,” Paul later continued. “The Section 301 tariffs, together with investments in industry and infrastructure, and Buy America domestic preferences, form the framework of an effective 21st century industrial policy for America.” 

Notably, the U.S. Trade Representative recommended that all Section 301 tariffs remain in place — something that wasn’t a given when Biden first came to office, as he faced heavy pressure from importers and misguided pundits to lift the tariffs. But ultimately, the Biden administration concluded “China’s unfair trade practices concerning technology transfer, intellectual property, and innovation are threatening American businesses and workers” and “China is also flooding global markets with artificially low-priced exports,” leading to Section 301 being maintained — and tariffs increased in a number of sectors.  

Here are some of the key sectors in which USTR is moving to increase tariff rates, and when those boosts are expected to kick in:

Electric Vehicles: Tariff rates on Chinese EV imports will increase by 100% under the Biden administration’s proposal. It’s a big boost, but a necessary one. As we warned in our On a Collision Course report, if artificially cheap Chinese autos are allowed to penetrate the U.S. market, it will lead to an “extinction-level event” for the American auto industry. The U.S. simply must not allow China’s government to succeed in its plan to dominate autos via a range of unfair trade practices — strong trade action is absolutely necessary in this critical sector.

Semiconductors: Biden plans to increase tariff rates by 50% in 2025 in this critical industry, which has been a key focus of the administration’s industrial policy over the past few years. As of May 14, the CHIPS and Science Act has incentivized nearly $400 billion in investments in semiconductor and microelectronics in the United States, and strong trade enforcement action is needed to get actual returns on these investments.

Solar Cells: Like semiconductors, the domestic solar industry was given a major boost in recent years because of the Biden administration’s industrial policy efforts. The Inflation Reduction Act helped spur big investment in clean energy, with $77 billion of new investments in the sector since Biden took office. But solar in particular faces intense pressure because of artificially cheap Chinese imports — and concerning that the domestic industry almost disappeared entirely once before, significant trade action is needed to shore up American-made solar. The Biden administration’s plan to increase solar cell tariffs by 50% in 2024 is a good start.

Batteries: The administration is proposing a 25% increase in tariff rates on non-lithium ion battery parts, lithium-ion electric vehicle batteries, and lithium ion non-electric vehicle batteries. The first two will see rates jump in 2024, while tariffs on lithium ion non-electric vehicle batteries will go into effect in 2026. Batteries are an absolutely critical industry, and will only increase in importance as the transition to electric vehicles moves ahead. It is critical that the United States has the production capability to build them, for both our national and economic security. China currently dominates battery production, and maintains overcapacity in the sector. Trade action is essential to leveling the playing field and ensuring the U.S. can scale up its own production.

Steel and Aluminum Products: Biden is also proposing a 25% boost in 2024 on Chinese imports of these critical metals, which have faced an onslaught of unfairly traded goods for decades. We’ve written at great length about the threat Chinese overcapacity poses for steel and aluminum, and why trade action — including the “Section 232” action on global imports — is so vital. Additional tariffs on Chinese metal imports is appropriate, given China’s continued failure to fixing its massive overcapacity problem.

Medical Gear and PPE: Remember during the Covid-19 pandemic when the United States couldn’t make the things it needed? There were a lot of promises made to increase domestic production of key medical supplies and personal protective equipment, but actually getting the job done has proved difficult. A chief reason is artificially cheap imports from China — which is obnoxious, given that China cut off PPE supplies when we needed them the most. Increased action to level the playing field for American producers is welcome, and the Biden administration is proposing 25% tariff increases on face masks and medical gloves, along with a 50% boost on syringes and needles. Most will go into effect this year; the tariff boost on gloves will be implemented in 2026.

Other product areas in which Biden is proposing increasing tariffs include natural graphite (25% boost in 2026); “other” critical minerals (25% in 2024); permanent magnets (25% in 2026); and ship to shore cranes (25% in 2024).

President Biden is scheduled to officially unveiled the findings of the USTR investigation and announced the trade enforcement action at the White House today. AAM President Scott Paul was on hand as well. You can watch the full event below.