Customs duty dispute between Joe Biden and Donald Trump

Examination On Tuesday, May 14, Joe Biden declared a dramatic hike in customs charges aimed at specific Chinese-made goods. Thus, the US president is attempting to disassociate himself from the policies started by his predecessor, Donald Trump, while carrying on with them.

Though they don’t have much in common, Joe Biden and Donald Trump both support protectionist policies toward China. The American president decided on Tuesday, May 14, to strengthen customs duties in order to protect sectors deemed strategic for national security and the energy transition. These sectors include essential minerals, products linked to solar energy and batteries, microprocessors, aluminum and steel, port cranes, medical objects, and more. The Republican predecessor had imposed these duties in 2018 as part of his “economic war” against the Asian giant. The most notable rise will be in levies, which would go from 25% to 100% for imported electric vehicles.

WASHINGTON (Reuters), May 14 – President of the United States Joe Biden risked an election-year stalemate with Beijing on Tuesday when he announced high tariff rises on a range of Chinese goods, including computer chips, medical supplies, and batteries for electric vehicles (EVs). Biden is trying to win over American voters who have low opinion of his economic policies.

In front of unions and businesses, Biden stated, “American workers can out-work and out-compete anyone as long as the competition is fair, but for too long it hasn’t been fair.” “We’re not going to let China flood our market.”

China pledged retaliation right away. Beijing’s trade ministry declared that it will take action to protect its interests and was against the US tariff hikes.

Biden intends to maintain the tariffs imposed by his Republican predecessor, Donald Trump, but he would increase others, such as tripling the charges on electric vehicles to more than 100% and doubling the tariffs on semiconductors to 50%.

According to the White House, the new restrictions apply to $18 billion worth of imported Chinese goods, which include semiconductors, electric cars, solar cells, cranes, steel and aluminum, and essential minerals. Even though the EV number makes headlines, the United States, which imports very few Chinese EVs, may be more affected politically than practically by it.

The declaration supported earlier Reuters reports.

According to the U.S. Census Bureau, the United States purchased $427 billion worth of goods from China in 2023 and exported $148 billion to the second-largest economy in the world. This trade deficit has continued for decades and has been increasingly contentious in Washington.

China was stealing intellectual property from the United States, according to U.S. Trade Representative Katherine Tai, who justified the higher duties. However, Tai suggested tariff exemptions and opened a new tab for hundreds of Chinese import categories of industrial machinery, including 19 for equipment used in the production of solar products.

NO MORE FREE TRADE

As Biden’s actions aligned with Trump’s assertion that more stringent trade regulations are necessary, the Democrat continued to criticize his opponent in the November election.

Biden claimed that Trump’s plan to hike import duties by 10% everywhere from any point of origin would drive up costs and criticized Trump’s 2020 trade agreement with China for failing to boost American exports or jobs.

The Biden administration’s new tariffs, according to Trump, should be applied to other kinds of automobiles and items “because China’s eating our lunch right now.” Trump has floated tariffs of 60% or higher on all Chinese exports.

Biden shot back, “He’s been feeding them a long time,” when he was questioned about the statement.

Administration officials claimed that these actions, when paired with domestic investment in important sectors of the economy, are unlikely to exacerbate an inflationary trend that has already infuriated American citizens.

Against a backdrop of low unemployment and above-trend economic growth, Biden has found it difficult to persuade Americans of the effectiveness of his economic initiatives. In a Reuters/Ipsos survey conducted last month, Trump led Biden by 7 percentage points in terms of the economy.

Experts have cautioned that a trade spat may drive up the price of EVs in general, undermining Biden’s efforts to reduce greenhouse gas emissions and boost manufacturing employment.

Saying that he does not intend to start a trade war, Biden wants to win this new phase of rivalry with China. In one-on-one meetings with Chinese President Xi Jinping, he has attempted in recent months to defuse tensions.

The free-trade consensus that ruled in Washington until China’s admission to the WTO in 2001 has been broken by both of the 2024 US presidential contenders. A tariff war between China and the United States was sparked by President Trump’s wider tariff impositions between 2017 and 2021.

Biden will raise tariffs under Section 301 of the Trade Act of 1974 this year on EVs from 25% to 100%, bringing the total duties to 102.5%; on lithium-ion EV batteries and other battery parts, from 7.5% to 25%; and on photovoltaic cells, which are used to make solar panels, from 25% to 50%, as part of the much-anticipated tariff update. Tariffs on a few essential minerals will increase from zero to twenty-five percent.

Tariffs on syringes and needles will increase to 50% from zero, those on ship-to-shore cranes will go from zero to twenty-five percent, and some of the personal protective equipment (PPE) used in medical facilities will go from zero to twenty-five percent. PPE shortages, primarily caused by shortages made in China, hindered the US reaction to COVID-19.

In 2025 and 2026, additional tariffs will be imposed on semiconductors, lithium-ion batteries that aren’t used in electric cars, permanent magnets, graphite, and rubber surgical and medical gloves.

According to the White House, Biden’s earlier announcement to increase tariffs on some steel and aluminum products will go into force this year.

Due to worries about data privacy, a number of lawmakers have advocated for a complete ban or sharp increases in taxes on Chinese automobiles. Imports of light-duty Chinese automobiles are now somewhat rare.

The politically significant organization that supported Biden, the United Auto Workers, claimed that the tariff changes would guarantee that “the transition to electric vehicles is a just transition.”

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