Hitting China Where It Hurts: Biden Raises Tariffs on Electric Cars and Semiconductors

The Biden administration in the United States has significantly increased trade barriers against China by quadrupling the tariff on Chinese electric vehicles to 100% and imposing high tariffs on some semiconductors. This move appears to preemptively block the entry of Chinese low-cost exports into the U.S. market while demonstrating its willingness to watch over China ahead of this year’s presidential election.

According to the New York Times (NYT) and the Wall Street Journal (WSJ) on the 11th (local time), the Biden administration is expected to announce the tariff increase on Chinese products as early as the 14th. The White House has long considered the effects of the high tariffs imposed on China by the Trump administration in 2018 and is planning to further raise tariffs in the clean energy and semiconductor sectors as a follow-up measure. The NYT reported, “Most of Trump’s tariffs are expected to remain the same,” adding that “Biden will surpass (Trump’s tariffs) by imposing additional tariffs on sectors where subsidies are being poured through the Inflation Reduction Act (IRA).”

The WSJ reported that the Biden administration is particularly focusing on low-cost electric vehicles from China. According to the new measures, tariffs on Chinese electric vehicles will increase from 25% to 100%, effectively blocking their entry into the U.S. market. President Biden previously ordered an assessment of security threats on Chinese-connected cars due to concerns about data leakage, and the U.S. Department of Commerce even mentioned the possibility of a total import ban.

In addition, high tariffs are expected to be imposed on some semiconductor products, including batteries and solar products. The U.S. Department of Commerce has been investigating the usage of Chinese legacy (general-purpose) semiconductors in major industrial sectors such as automotive, aerospace, and national defense within U.S. companies, and attention is being paid to whether tariffs will be imposed on them. Legacy semiconductors are considered a representative item overproduced by China, along with electric vehicles and solar power.

China is strongly opposing the possibility of new tariffs by the United States. Lin Jian, a spokesperson for the Chinese Ministry of Foreign Affairs, stated, “Instead of ending Trump’s mistaken practices, the U.S. continues to politicize trade issues,” adding that “China will take all measures to protect its rights and interests.”