President Biden has unveiled a strategic plan to protect American workers and businesses from China’s unfair trade practices, focusing on the electric vehicle (EV) sector and other critical industries. This plan includes increased tariffs on $18 billion of Chinese imports, aiming to create a level playing field for American businesses and foster economic growth.
Key Highlights:
- $18 billion in increased tariffs on Chinese imports
- Focus on strategic sectors including EVs, semiconductors, and clean energy
- Support from Bipartisan Infrastructure Law, CHIPS and Science Act, and Inflation Reduction Act
- Nearly $860 billion in business investments catalyzed by the Biden-Harris Administration
- Tariff rates on electric vehicles to increase from 25% to 100% in 2024
President Biden’s economic plan emphasizes investments and job creation in key sectors essential for America’s economic future and national security. China’s unfair trade practices, including technology transfer, intellectual property theft, and flooding global markets with artificially low-priced exports, are undermining American businesses and workers. To counter these issues, President Biden is directing an increase in tariffs under Section 301 of the Trade Act of 1974.
The Biden-Harris Administration‘s Investing in America agenda has already catalyzed more than $860 billion in business investments through smart public incentives in future industries like electric vehicles (EVs), clean energy, and semiconductors. Supported by the Bipartisan Infrastructure Law, CHIPS and Science Act, and Inflation Reduction Act, these investments are creating new American jobs in manufacturing and clean energy and revitalizing communities left behind.
Addressing Unfair Trade Practices
China’s forced technology transfers and intellectual property theft have contributed to its dominance in global production for critical inputs necessary for technologies, infrastructure, energy, and health care. These practices pose significant risks to America’s supply chains and economic security. China’s non-market policies and practices have led to overcapacity and export surges that threaten American workers, businesses, and communities.
President Biden’s response targets strategic sectors where the U.S. is making historic investments to create and sustain good-paying jobs. Unlike recent proposals by Congressional Republicans that could threaten jobs and raise costs, today’s actions are aimed at protecting American interests.
Focus on Electric Vehicles (EVs)
The tariff rate on electric vehicles will increase from 25% to 100% in 2024. China’s extensive subsidies and non-market practices have led to significant risks of overcapacity, with EV exports growing by 70% from 2022 to 2023. A 100% tariff rate on EVs will protect American manufacturers from these unfair practices.
President Biden’s vision includes ensuring the future of the auto industry is made in America by American workers. As part of the Investing in America agenda, the administration is incentivizing the development of a robust EV market through business tax credits for manufacturing batteries and critical minerals, consumer tax credits for EV adoption, smart standards, federal investments in EV charging infrastructure, and grants to support EV and battery manufacturing.
Batteries, Semiconductors, and Critical Minerals
The plan also includes tariff increases on lithium-ion EV batteries, semiconductors, and critical minerals. The tariff rate on semiconductors will increase from 25% to 50% by 2025. This measure is aimed at counteracting China’s dominance in the legacy semiconductor sector and ensuring the sustainability of investments in American semiconductor manufacturing capacity.
The tariff rate on lithium-ion EV batteries will increase from 7.5% to 25% in 2024, while the rate on lithium-ion non-EV batteries will increase from 7.5% to 25% in 2026. The Biden-Harris Administration has invested nearly $20 billion in grants and loans to expand domestic production capacity of advanced batteries and battery materials, bolstering U.S. supply chain security and clean energy goals.
Bottom Line
President Biden’s actions reflect a strong commitment to protecting American workers and businesses from unfair trade practices. By increasing tariffs on strategic imports and fostering investments in critical sectors like EVs, clean energy, and semiconductors, the administration aims to ensure fair competition and a prosperous economic future for America.
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