Biden cranks up the heat on China with wall of tech tariffs
- Reference: 1715790492
- News link: https://www.theregister.co.uk/2024/05/15/us_china_tariff_hikes/
- Source link:
This is in addition to the quadrupling of tariffs on Chinese EVs [1]reported on Monday.
The White House statement [2]called the tariffs "carefully targeted at strategic sectors" as a "response to China's unfair trade practices." They cover $18 billion worth of imports from China annually.
[3]
The increases followed an "in-depth review," said the administration. The tariffs were introduced during the Trump administration and were up for a planned evaluation. While it was generally expected to have a mix of rising and falling tariffs following the review, none actually declined.
Semiconductors
Semiconductors will see a tariff increase from 25 to 50 percent by 2025, which, when combined with the $39 billion worth of semiconductor incentives from the CHIPS Act, is expected to promote American chip products.
"China's policies in the legacy semiconductor sector have led to growing market share and rapid capacity expansion that risks driving out investment by market-driven firms," said the White House. The US government expects China to account for almost half of all new capacity coming online to manufacture certain legacy semiconductor wafers over the next three to five years.
[4]
[5]
The Biden administration also warned against over-reliance on China, lest the world see a re-emergence of [6]supply chain disruptions like the ones experienced during the COVID-19 pandemic.
Batteries and critical minerals
The import taxes for lithium-ion batteries and battery parts all increased from 7.5 percent to 25 percent. However, for battery parts and EV batteries, that will take effect in 2024, while non-EV batteries won't increase until 2026.
Tariffs on natural graphite and permanent magnets are new to the scheme, going from nada to 25 percent in 2026. Other critical minerals will see the same, but two years earlier.
"Despite rapid and recent progress in US onshoring, China currently controls over 80 percent of certain segments of the EV battery supply chain, particularly upstream nodes such as critical minerals mining, processing, and refining," stated the announcement.
Solar cells
A hike on solar cell, both assembled and not, tariff rates from 25 percent to 50 percent in 2024 is designed to "protect against China's policy-driven overcapacity that depresses prices and inhibits the development of solar capacity outside of China." The Biden administration said China dominates upward of 80 to 90 percent of certain parts of the global solar supply chain.
[7]EU duties might not be enough to hold off flood of Chinese EVs
[8]A Chinese crypto farm next to a nuclear missile base? Not on my watch says Biden
[9]US, China agree to meet in Switzerland to discuss most pressing issue of all: AI use
[10]Korea's SK Innovation liquidates Chinese battery subsidiary
The wider conversation
US Treasury Secretary Janet Yellen, who was once [11]outspoken against the tariffs, told [12]US media she "didn't believe American consumers will see any meaningful increase in prices they face."
She argued that the tariffs as they are now are very carefully targeted to areas where there is an over-dependence on China.
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"These are areas where the investments that we are making will ultimately result in lower prices," alleged Yellen.
"Mainly, these tariff increases serve to protect firms and workers that are being supported by the incentives, the tax incentives, and other incentives in the semiconductor and CHIPS Act and Inflation Reduction Act," she added.
Yellen said she hopes China reacts in a "rational way."
[14]
Whether merely rhetoric or an actual threat, China's Foreign Ministry spokesperson Wang Wenbin has multiple times [15]reiterated that China will "take all necessary measures to defend its rights and interests."
Beijing is not the only one unhappy about the tariffs. The US-China Business Council (USBC) expressed disappointment.
USBC president Craig Allen claimed "maintenance of the prior tariffs –with no reductions – and imposition of additional tariffs ultimately make it harder for American companies to compete in the US and abroad, cost American jobs, and increase prices for US manufacturers and consumers during a time of ongoing inflation." ®
Get our [16]Tech Resources
[1] https://www.theregister.com/2024/05/13/chinese_ev_tariffs/
[2] https://www.whitehouse.gov/briefing-room/statements-releases/2024/05/14/fact-sheet-president-biden-takes-action-to-protect-american-workers-and-businesses-from-chinas-unfair-trade-practices/
[3] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/systems&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=2&c=2ZkUwgajzz7xYKXEm3JmBtwAAAAU&t=ct%3Dns%26unitnum%3D2%26raptor%3Dcondor%26pos%3Dtop%26test%3D0
[4] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/systems&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=4&c=44ZkUwgajzz7xYKXEm3JmBtwAAAAU&t=ct%3Dns%26unitnum%3D4%26raptor%3Dfalcon%26pos%3Dmid%26test%3D0
[5] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/systems&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=3&c=33ZkUwgajzz7xYKXEm3JmBtwAAAAU&t=ct%3Dns%26unitnum%3D3%26raptor%3Deagle%26pos%3Dmid%26test%3D0
[6] https://www.theregister.com/2022/12/19/china_supply_chain_living_with_covid/
[7] https://www.theregister.com/2024/04/30/report_eu_duties_electric_vehicles/
[8] https://www.theregister.com/2024/05/14/biden_mineone_cryptocurrency/
[9] https://www.theregister.com/2024/05/13/us_china_ai/
[10] https://www.theregister.com/2024/03/14/sk_liquidates_chinese_battery/
[11] https://www.nytimes.com/2021/07/16/us/politics/yellen-us-china-trade.html
[12] https://www.pbs.org/newshour/show/treasury-secretary-yellen-on-why-biden-is-targeting-chinese-manufacturing-with-new-tariffs
[13] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/systems&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=4&c=44ZkUwgajzz7xYKXEm3JmBtwAAAAU&t=ct%3Dns%26unitnum%3D4%26raptor%3Dfalcon%26pos%3Dmid%26test%3D0
[14] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/systems&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=3&c=33ZkUwgajzz7xYKXEm3JmBtwAAAAU&t=ct%3Dns%26unitnum%3D3%26raptor%3Deagle%26pos%3Dmid%26test%3D0
[15] https://www.fmprc.gov.cn/mfa_eng/xwfw_665399/s2510_665401/2511_665403/202405/t20240510_11302796.html
[16] https://whitepapers.theregister.com/
"didn't believe American consumers will see any meaningful increase in prices they face." - Janet Yellen
I'll have whatever she's having. The tariffs are paid on the US side of the pond. Who does she think is at the end of the payment chain? Those in the middle are going to pass it on down the line until it's in the consumer's laps.
Where there is a viable home grown option, then sure, tariffs can possibly convince manufacturers to use the native source. However, when there is no other option (speaking mainly of semiconductors), then this is nothing more than another governmental tax grab.
....not that she cares.
I feel I'm stuck with this political shitshow because the alternative doesn't bear thinking about. But, seriously, how far do you think these people can go before they alienate the electorate? A lot of things like cars are essential to many -- possibly most -- Americans and their need to keep competition out or at artificially inflated prices just to keep Wall Street happy is wearing my patience thin.
We went down this route in the 1980s. It didn't work then and it most certainly won't work now.
> A lot of things like cars are essential to many -- possibly most -- Americans
Are these the same Americans whose job is under threat because the CCP is exporting subsidized goods and exploiting its own workforce?
Maybe they prefer to keep their job and use the money to buy cars that don't catch fire above 60mph even though they are a bit more expensive than the Chinese junk.
Janet Yellen is a liar and only cares about her bank account and those of her political cronies.
Remember when she said inflation was transitory and will op up and go right back down? Or more recently said how Americans are doing great, they just don't realise it?
It won't affect car prices because no Chinese cars are being imported today. It won't affect semiconductors too much because very few chips of the type that cost more than a few cents are being imported into the US either. The only thing it will really affect is solar, but prices for panels are so low no that installation labor is the dominant cost now. The biggest impact on solar will be for utility scale projects, where the labor component is the smallest (it is easier to deploy tens of thousands of panels in a big field than it is to deploy a couple dozen on a pitched roof that will leak if things aren't done right)
The real effect is losing the chance at future price decreases for EVs that Chinese imports would bring, but that would come at the cost of decimating America's auto companies and entire automotive supply chain over time. That's millions of jobs, so even if consumers got a short term benefit from having much cheaper cars (new cars costing less than half what the cheapest car costs in the US - EV or ICE) would lose in the long term from how much havoc losing the entire auto industry would cause.
It is funny how techies will decry "protectionism" and say that if a US industry can't compete that's too bad, because it will benefit the rest of us. But when you mention offshoring, H1Bs, or the like suddenly they are all for taking measure to protect THEIR job and quality of life.
So much for "free market" and "undistorted competition" believers, then.
See title.
Re: So much for "free market" and "undistorted competition" believers, then.
Sadly the market going the other way is hardly free either.
lol
Xiden couldn't crank up a radio, if he could recognise one.
About competition .. harsh truth ..
"I’d later learn that the auto show had more than 100 new model debuts and concepts. That’s a far cry from the Detroit Auto Show last September, which only featured one fully new model. Two other models were refreshed versions of current cars already on sale. None were electric."
InsideEVs
Solar, wind, batteries, semiconductors, etc... are all in the same way.