• The Biden-Harris administration is set to announce tariff increases on certain Chinese imports, a move met with apprehension by the U.S. industry.
• The tariffs, including a quadrupling on Chinese electric vehicles and a doubling on semiconductors and solar cells, were designed to protect U.S. firms.
• The decision to ease or maintain the tariffs is politically tricky, with potential backlash from both Republicans and Democrats.
• The tariff decision could have far-reaching implications for the global economy, U.S.-China relations, and U.S. domestic politics.

The Biden-Harris administration is on the brink of announcing final implementation plans for significant tariff increases on certain Chinese imports. This decision, which has been met with apprehension by the U.S. industry, could potentially soften many of the planned duties if the industry's concerns are taken into account. Manufacturers from various sectors, including electric vehicles and electric utility equipment, have appealed for the higher tariff rates to be reduced, delayed, or abandoned. They have also requested for potential exclusions to be greatly expanded.

President Joe Biden announced in May a quadrupling of tariffs on Chinese electric vehicles to 100%, a doubling of duties on semiconductors and solar cells to 50%, as well as new 25% tariffs on lithium-ion batteries and other strategic goods including steel. These measures were designed to shield U.S. firms from Chinese excess production. The White House initially stated that the new tariffs would take effect on August 1.

However, this was delayed until some time in September as the U.S. Trade Representative's office studied more than 1,100 public comments. A final determination is due by the end of August.

The Political Implications of the Tariff Decision

The decision to ease or maintain the tariffs is the administration's first major trade decision since Vice President Kamala Harris emerged as the Democratic Party's presidential nominee after Biden stepped aside in late July. The decision is politically tricky. Dialing back the duties could draw criticism from Republicans that Harris will take a softer stand on China trade in a campaign where Trump has vowed to hit Chinese imports with hefty tariffs. Proceeding with the original hikes would draw complaints about higher costs, even from some Democrats in Congress.

China has vowed retaliation against the bullying tariff hikes and Foreign Minister Wang Yi said they showed that some in the U.S. may be losing their minds. The U.S. decision will come in the same week that U.S. National Security Adviser Jake Sullivan will meet with Wang in a visit aimed at keeping U.S.-China tensions in check with the November U.S. election fast approaching.

The Impact on U.S. Industry and Consumers

The Biden-Harris tariffs include a new 25% levy on Chinese-made ship-to-shore cranes, a China-dominated sector with no U.S. producers. The Port of New York and New Jersey said it has eight cranes on order from China's state-owned ZPMC at $18 million apiece, and a 25% tariff would boost the cost of each by $4.5 million, causing a significant strain on the Port's critical and limited resources.

Democratic senators Tim Kaine and Mark Warner from Virginia and Raphael Warnock and Jon Ossoff from Georgia also raised concerns about the impact on ports in their states, calling for existing orders for Chinese cranes to be exempted. Warnock and Ossoff also urged USTR to reconsider the planned 50% tariff on syringes, saying they could disrupt supplies for those used to feed newborn infants.

Ford Motor asked USTR to reduce proposed tariffs on artificial graphite, a key material used in the production of anodes for electric vehicle batteries. Ford said it still almost exclusively uses Chinese secondary-particle graphite. Autos Drive America, a group representing foreign-brand automakers, called for tariff rates on batteries, modules, cells, and critical minerals to be kept stable through at least 2027 to allow automakers to fulfill investments in U.S. production and to bolster consumer adoption of EVs.

In conclusion, the Biden-Harris administration's decision to increase tariffs on Chinese imports is a significant development that could have far-reaching implications for the global economy, U.S.-China relations, and U.S. domestic politics. It reflects the ongoing tensions in U.S.-China trade relations and the challenges of balancing economic, strategic, and political considerations in policymaking. As the final determination is due by the end of August, the world will be watching closely to see how this decision will shape the future of U.S.-China trade relations and its impact on the global economy.