China Reacts Strongly to U.S. Solar Tariff Increase, Claims It Will Only Hurt Consumers and Fuel Inflation

The U.S. decision to double tariffs on Chinese solar wafers and polysilicon, which began in January, has met with swift opposition from China. The Chinese Ministry of Commerce has criticized the move, arguing it will only exacerbate inflation within the United States.

A spokesperson for the Chinese Ministry of Commerce firmly stated China’s position in an official statement that tariff hikes “pile errors onto errors” and will “harm the interests of US consumers.” The statement also emphasized that the World Trade Organization (WTO) has already ruled that U.S. Section 301 tariffs violate international norms, making the U.S. decision to expand these tariffs misguided.

The ministry’s announcement is expected to send ripples through China’s domestic and international spheres. Addressing the negative impacts of the tariff hike, the spokesperson cautioned that U.S. tariff measures would fail to resolve trade deficit issues or boost industrial competitiveness. Instead, they could fuel inflation and harm consumer interests in the U.S. The statement also warned that this move could undermine the stability of the international economic order and global supply chains.

The Office of the U.S. Trade Representative (USTR) recently disclosed plans to raise tariffs on Chinese solar wafers and polysilicon to 50% while increasing duties on tungsten from 0% to 25%. Following President Joe Biden’s directive, this decision addresses China’s alleged unfair trade practices (Trade Act Section 301).

This action is seen as a continuation of the U.S. strategy to increase tariffs on Chinese electric vehicles and batteries significantly. In May, Biden instructed the USTR to raise tariffs in response to these perceived unfair practices and economic damages. Recent Section 301 actions have even led to proposals for increasing electric vehicle tariffs to 100%.

The Chinese government vehemently calls for the U.S. to retract these measures and restore the original trade order. A spokesperson stated that China is ready to protect its interests and is waiting to rectify the situation.

This escalating trade dispute between the world’s two largest economies is drawing global attention because of its potential far-reaching impact on the world economy. Many are closely watching how it might shape future negotiations between China and the United States.