U.S. President Joe Biden on Tuesday authorized sweeping new tariffs on $18 billion of goods imported from China and made pot shots at former President Donald Trump as the pair battle for votes in northern manufacturing states that decided the last two presidential races.
The tariffs include a 100% levy on electric vehicles, a 50% levy on solar cells and microchips, a 25% levy on electric vehicle batteries and their critical mineral components, a 25% levy on steel and aluminum, and a range of smaller levies on health equipment like face masks.
Biden said the tariffs were necessary because the Chinese government’s heavy subsidization of those industries means the country is “cheating” in the global competition to produce goods cheaply, and was thereby harming U.S. manufacturers.
The tariffs will “ensure that our workers are not held back by unfair trade practices,” he said, and “counter China's overcapacity in these industries” by making domestic goods more price competitive.
Biden acknowledged the 100% tariff on electric cars was steep, but said it was necessary after “heavy subsidies” led to Chinese firms “dumping their excess products onto the market at unfairly low prices, driving other manufacturers around the world out of business.”
“People say, ‘Wow,’ [but it’s] because we're not gonna let China flood our market, making it impossible for American auto manufacturers to compete fairly,” he said. “I am determined that the future of electric vehicles will be made in America by union workers.”
He added that he thought it was likely China would respond negatively to the tariffs, even if they were already “way over their skis on this.”
“I don't think it'll lead to any international conflict or anything like that,” Biden said. “But I think they'll probably try to figure out how they can raise tariffs, maybe on products that are unrelated.”
The Trump factor
This year’s Nov. 5 presidential rematch with Trump loomed large over the tariff announcement, with Biden repeatedly referring to the former president while staking his claims to be a pro-worker president.
Roxanne Brown, a vice president of the United Steelworkers Union, earlier introduced Biden at the White House ceremony and called him “the most pro-worker, pro-union president we've ever had,” a description that Biden said he was “proud” to accept.
Throughout his press conference, Biden then repeatedly took apparently unscripted pot shots at Trump, at first referring to him as “the other guy,” then as “my predecessor” and finally by name.
He said Trump, who put in place tariffs on some $300 million in Chinese goods, promised “to increase American imports and boost manufacturing” while in office but in the end “did neither,” with Chinese imports into the United States growing during his term in office.
The impact of trade with China on U.S. manufacturing looks set to again prove decisive come Nov. 5, with Biden and Trump fighting it out to be seen as the more pro-worker candidate in three northern states whose 46 electoral votes swayed the last two presidential races.
Trump won the 2016 presidential election by 77 electoral votes thanks largely to upset victories in the Rust Belt states of Wisconsin, Michigan and Pennsylvania, all of which historically relied on manufacturing but whose industries were hollowed out by increased trade with China.
Biden then defeated Trump in 2020 by 74 electoral votes after winning back the three Rust Belt states for the Democratic Party.
In both elections, the 46 electoral votes together held by Wisconsin, Michigan and Pennsylvania would have reversed the election result if they had in fact been won by the losing candidate.
Ahead of the Nov. 5 rematch between Biden and Trump, betting markets currently have the result in each of the three states at a 50-50 chance of being won by either candidate, positioning them to again serve as kingmakers in the 2024 presidential election.
Inflation
But U.S. officials denied that electoral politics drove the decision to increase tariffs, which as recently as a decade ago were anathema in Washington as both parties pushed free trade on the world.
Speaking at a White House press briefing, U.S. Trade Representative Katherine Tai said the idea the tariffs were timed for an election year was wrong. Instead, she said, it was the product of a long bureaucratic process Biden had started when he took office in 2021.
Tai also pushed back on the idea that Biden had “changed his mind” on tariffs after a reporter highlighted a 2019 post on Twitter in which Biden appeared to criticize Trump’s tariffs on China as inflationary.
"Trump doesn't get the basics. He thinks his tariffs are being paid by China," Biden said on Twitter at the time. "Any freshman econ student could tell you that the American people are paying his tariffs."
She said Biden’s tariffs were different to Trump’s.
“When used strategically and smartly, they can be powerful forces for economic strength and development,” Tai said, before denying tariffs would drive up inflation by increasing the prices Americans pay. “That link in terms of tariffs to prices has been largely debunked.”
Heading into court in New York earlier Tuesday, Trump, who has since proposed a 60% across-the-board levy on all imports from China and a 10% tariff on goods imported from elsewhere, said the announcement from Biden did not go far enough and was coming too late.
“He wants to put a big tariffs on China, which is the suggestion that I said, 'Where have you been for three and a half years?'” Trump told reporters. “They should have done that a long time ago.”
In Beijing, Chinese Foreign Affairs Ministry spokesperson Wang Wenbin was unusually circumspect when asked about the tariffs.
“China opposes unilateral tariffs that violate WTO rules,” Wang said, referring to the World Trade Organization, “and will take all measures necessary to defend our legitimate rights and interests.”
Edited by Malcolm Foster.