US Once Again Delays Announcement on New Tariffs on EV, Semi and Other Chinese Imports

TMTPost -- The United States has delayed an announcement on new tariffs on electric vehicle (EV), semiconductor and other Chinese imports.

Credit：Xinhua News Agency

The Office of the United States Trade Representative (USTR) continues to work to finalize the determination regarding certain proposed modifications of the actions in the Section 301 investigation of China’s Acts, Policies, and Practices Related to Technology Transfer, Intellectual Property, and Innovation, and intends to make it public in the coming days, the agency said in a statement at weekend.

The latest statement marked USTR’s another delay of the tariff announcement. The agency has announced in May some of the tariff increases on Chinese imports including EVs and their batteries would come into effect on August 1. But two months later, it said late July that it was still reviewing 1,100 comments received and those tariffs would be postponed by at least two weeks, disclosing its intention to make public in August the final determination.

The White House announced on May 12 that U.S. PresidentJoeBiden directed his Trade Representative to increase tariffs under Section 301 of the Trade Act of 1974 on $18 billion of Chinese imports in order toprotect American workers and American companies from China’s unfair trade practices.President Biden is directing increases in tariffs across strategic sectors such as steel and aluminum, semiconductors, electric vehicles, batteries, critical minerals, solar cells, ship-to-shore cranes, and medical products,the White House said at its statement.

According to the statement, the Biden administration will sharply ratchet up tariffs on semiconductors, EVs,EV batteries, battery parts, solar cells and steel and aluminum, and impose new tariffs on cranes and medical products. Specifically, the tariff rate on EVs under Section 301 will increase to 100% in 2024, quadrupling the current tariff of 25%. The tariff rate on semiconductors will increase from 25% to 50% by 2025. The tariff rate on lithium-ion EV batteries will increase from 7.5%% to 25% in 2024, while the tariff rate on lithium-ion non-EV batteries will increase from 7.5% to 25% in 2026. The tariff rate on battery parts will increase from 7.5% to 25% in 2024. The tariff rate on certain steel and aluminum products under Section 301 will increase from 0–7.5% to 25% in 2024. The tariff rate on solar cells (whether or not assembled into modules) will increase from 25% to 50% in 2024.The tariff rate on ship-to-shore cranes will increase from 0% to 25% in 2024. The tariff rates on syringes and needles will increase from 0% to 50% in 2024.

The U.S. government’s another delay of the start of new China tariffs fully reflected the growing opposition from US businesses and industries, the Global Times, Chinese state-backed newspaper, cited experts. As s the US continues to intensify its crackdown against Chinese products, the costs for US businesses and consumers will continue to increase, which will in turn translate into growing criticism of the protectionist US actions. Washington should stop politicizing trade issues and focus on addressing disputes through ongoing talks, according to these experts.

The election year requires the Democratic Party to balance competing issues when deciding how to implement the tariffs, Thibault Denamial, an associate fellow and Scholl Chair in International Business at the Center for Strategic and International Studies, commented on the latest USTR delay. “The Democratic Party certainly doesn’t want to seem soft on China,” Denamial told VOA. “But there is so much pushback from industry and from domestic stakeholders who argue that the new tariffs are going to be destructive to the U.S. economy, so kicking the can [delaying action on the tariffs] seems like an attractive option right now.”