Trade and Manufacturing in the United States: Implications of the Biden-Biden Investment Policy on Artificially Cheap Chinese Imports

President Biden will slap tariffs on $18 billion of imports of goods from China including electric vehicles, semiconductors, and medical products to protect the strategic sectors and punish China for unfair trade practices.

She stated that she raised concerns regarding artificially cheap Chinese imports while on a trip to Beijing last month. She believes the new tariffs are necessary to make sure American workers and companies are protected from unfairly traded products.

The move comes as Biden pushes for three pieces of legislation that have hundreds of billions of subsidies in them to boost the domestic manufacturing and clean energy sectors.

“We know China’s unfair practices have harmed communities in Michigan and Pennsylvania and around the country that are now having the opportunity to come back due to President Biden’s investment agenda,” Lael Brainard, Biden’s top economic adviser, told reporters.

“One of the challenges is once tariffs have been imposed, it is quite difficult politically to reduce them — because the affected industry tends to get used to them, like them, operate with them as baked into their plans,” said Michael Froman, who was U.S. Trade Representative during the Obama administration.

The strategy of the White House was tried to separate it from the approach of the president. It points to comments made by Trump in rallies and interviews that he would broaden tariffs on all imported goods, including targeting Chinese cars, if he wins the election — something that they said would hike consumer prices.

The White House said that the tariffs were unlikely to cause antagonization with China and that the issues have been discussed in meetings between the two countries.

The US has taken many different actions as it ramps up domestic manufacturing while trade tensions with China are heightening. The effects of the increased tariffs are expected to be around $18 billion a year.

The US electric vehicle industry, which lags behind China in price and quality, is worried about the new move by the Biden administration against Chinese vehicles.

The tariffs are also meant to start the clock on the US’s own domestic electric vehicle development, which will need more and cheaper electric cars, but also the batteries and battery supply chains to make them go.

A Commerce Department investigation concluded that Chinese companies were circumventing tariffs by exporting to other countries, prompting solar manufacturers in the US to call for tariffs on solar panels from four countries in Southeast Asia.

The US already blocks solar imports from China’s Xinjiang region, where roughly 40 percent of solar-grade polysilicon manufacturing takes place, over concerns about forced labor and human rights violations along the supply chain.

Does the US Auto Industry Want to Become More Responsible on Climate Change? A Commentary by John Bozzella, Managing Director of the Alliance for Automotive Innovation

Climate change hangs over the US auto industry and the world as a whole. Motor and diesel fuel consumption in the US transportation sector accounted for nearly a third of the country’s energy-related carbon dioxide emissions last year, according to the US Energy Information Administration.

Will the effort work? In a written statement, John Bozzella, president and CEO of the US’s main auto lobbying group, the Alliance for Automotive Innovation, was sanguine: “US automakers can outcompete and out innovate anyone on the EV transition,” he said. I’m pretty sure that’s true. The issue at this moment is time.

Meanwhile, another influential US policy, the Inflation Reduction Act, directs billions to building up domestic supply chains for electric vehicles and other renewable energy sources. But those efforts could take years.

“The administration is trying to walk a line,” says Susan Helper, a professor of economics at Case Western Reserve University, who worked on electric vehicle policy in the Biden administration. “One goal is a strong auto industry with good jobs and clean production methods, and the other is fast action on climate change. They are consistent in the long-term. In the short term, there’s conflict.”