Omar Nashashibi Omar Nashashibi
Partner

The Tariff Men: Biden Continues Trump’s China Tariffs

June 12, 2024
0
Comments


Better late than never, is how one might describe the Biden administration’s release of its report on the effectiveness of former President Trump’s tariffs on Chinese imports. The report resulted in President Biden increasing tariffs on a targeted group of Chinese imports, including electric vehicles (EVs), steel and aluminum, and semiconductors. 

One VoiceThe report’s release also led the Office of the U.S. Trade Representative (USTR) to announce that it will retain the 25% tariffs on more than 6800 imports from China. USTR also is allowing importers to request an exclusion from paying the tax on a select list of shipments from China, which, if approved, suspends the tariff on that import through May 31, 2025.

The legally required 4-yr. review concludes that China’s market share of U.S. imports decreased since the imposition of the tariffs starting in 2018, and that hundreds of companies moved production capacity out of China as a direct result of the Section 301 tariff actions. 

However, China continues much of the illegal acts which prompted the Trump administration to impose the tariffs. The report finds that “many of the technology transfer-related acts, policies and practices described in the original Section 301 Report persist and increasingly burden or restrict U.S. commerce.” 

In line with its efforts to boost renewable-energy industries, infrastructure and semiconductor manufacturing, the Biden administration will begin increasing tariffs in “strategic sectors.” Starting in August 2024, tariffs increase to 25% on Chinese imports of EV batteries, steel and aluminum, and ship-to-shore cranes. Also this year, the tariff on Chinese-made EVs quadruples to 100%, with solar cells, and needles and syringes increasing to 50%. Over the coming 2 yr., additional products imported from China face a 25% tariff rate, up from 7.5%, such as graphite, medical gloves and permanent magnets. 

In the report, USTR specifies that the over-production of steel and aluminum in China distorts the global market and harms the domestic industry, adding that tariffs will reduce “opportunities for circumvention and help ensure the long-term viability of U.S. production.” 

USTR also is establishing a new limited exclusion process for manufacturing machinery, and automatic temporary exclusions for certain solar-manufacturing equipment. The exclusion process only applies to certain products listed under HTS Chapter 84 (nuclear reactors, boilers, machinery and mechanical appliances; and parts thereof) and Chapter 85 (electrical machinery and equipment and parts thereof, and other goods). Among the imports from China eligible for a suspension of the tariffs: profile-forming and CNC roll forming machines, CNC press brakes, and hydraulic and servo presses.  

USTR is accepting public comments on the new tariffs and exclusion process through June 28.

The Biden administration, with the ability to increase tariffs ahead of the November 5th election, had no political choice but to retain all tariffs imposed by Trump. In the critical battleground states of Michigan, Pennsylvania and Wisconsin, the issues of trade and China resonate with voters.

Manufacturers competing with imports from China should expect tariffs to remain in place for the duration of either a second Biden or Trump term. 

The focus on steel and aluminum tariffs is clear. In a preview of the recent action, President Biden, in a speech to steelworkers in Pittsburgh on April 17, pledged to triple the tariff rate on steel from China. Biden’s updated tariff list includes an increase rate to 25% on additional hot-rolled flat-rolled products, dozens of stainless-steel imports in various forms, and cold-rolled tool steel, among others subject to the higher tariff rate starting August 1. Upon entry to the United States, nearly all Chinese steel now is subject to a combined 50% rate when accounting for both the Section 301 action specific to China and the Section 232 national-security tariffs on steel and aluminum. China, of course, announced retaliation for the Biden administration’s actions, though muted by historical standards. 

While long overdue, the announcement that Biden will retain all tariffs on China and increase others is a harbinger of what’s to come, regardless of who occupies the White House. As USTR receives input from the public on the new tariff rate and accepts applications for exclusions, manufacturers should take note of any impact on their supply chains and competition. 

They also should not expect any change in policy toward Beijing in the coming years. If reelected, President Biden is expected to prioritize imposing a carbon-based tariff on steel and aluminum imports. We expect USTR to receive a government report in January 2025 on the carbon-emissions footprint of U.S.-produced steel and aluminum. A second Biden administration would use this data to levy a tariff on carbon-heavy imports from China and other countries.

Industry-Related Terms: CNC, Forming, Roll Forming
View Glossary of Metalforming Terms

 

See also: Precision Metalforming Association

Technologies: Management

Comments

Must be logged in to post a comment.
There are no comments posted.

Subscribe to the Newsletter

Start receiving newsletters.