The hike would triple the tax on Chinese steel and aluminum. Biden says China overproduces goods made with these materials because it has a surplus.
on Chinese electric vehicles, advanced batteries, solar cells, steel, aluminum and medical equipment — an election-year move that's likely to increase friction between the world's two largest economies.The tariffs are unlikely to have much of an inflationary impact because of how they’re structured. Administration officials said they think the tariffs won't escalate tensions with China, yet they expect that China will explore ways to respond to the new taxes on their products.
Administration officials have stressed that the decision on tariffs was made independently of November's presidential election. But Brainard noted in her remarks that the tariffs would help workers in Pennsylvania and Michigan, two of the battleground states that will decide who wins the election. The new tariffs, at least initially, are largely symbolic since they will apply to only about $18 billion in imports. A new analysis by Oxford Economics estimates that the tariffs — which would be implemented over time — will have a barely noticeable impact on inflation by pushing up inflation by just 0.01%.Chinese embassy spokesperson Liu Pengyu rejected U.S. claims that Beijing has encouraged excess factory capacity in order to dominate global trade in these goods.
“China’s factory-led recovery and weak consumption growth, which are translating into excess capacity and an aggressive search for foreign markets, in tandem with the looming U.S. election season add up to a perfect recipe for escalating U.S. trade fractions with China,’’ said Eswar Prasad, professor of trade policy at Cornell University.
The Biden administration views China with subsidies of its own manufacturing as trying to globally control the EV and clean energy sectors, whereas it says its own industrial support is geared toward ensuring domestic supplies to help meet U.S. demand. Chinese Foreign Ministry spokesperson Lin Jian said Friday that the new tariffs compounded the problems caused by tariffs that the Trump administration had previously put on Chinese goods, which Biden has kept.
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