Biden increases tariffs on $18 billion in Chinese imports in a new warning to Beijing

Washington (CNN) — President Joe Biden is increasing tariffs on $18 billion in Chinese imports across a handful of sectors deemed strategic to national security – an attempt to cripple Beijing’s development of critical technologies and instead prioritize US production.

The increases will apply to imported steel and aluminum, legacy semiconductors, electric vehicles, battery components, critical minerals, solar cells, cranes and medical products. The new tariff rates – which range from 100% on electric vehicles, to 50% for solar components, to 25% for all other sectors – will take place over the next two years.

“China’s using the same playbook it has before to power its own growth at the expense of others,” said Lael Brainard, director of the White House National Economic Council. “China’s simply too big to play by its own rules.”

Announcing the new tariffs during a speech in the Rose Garden on Tuesday, Biden said he seeks “fair competition with China, not conflict.”

“The fact is, American workers can out-work and out-compete anyone, as long as the competition is fair,” Biden said. “For too long, it hasn’t been fair.”

Biden’s predecessor, former President Donald Trump, enacted a sweeping tariff program on $300 billion in Chinese imports during his administration, drawing authority from a provision in US trade law that allows tariffs to be used to stifle competition that would threaten national security interests. That same trade law also requires the effectiveness of such tariff programs to be evaluated every four years, and the Biden administration decision is the result of that study. CNN previously reported on the forthcoming changes.

White House officials said they also redrew the parameters of the program to reflect the Biden administration’s policy priorities, most notably the transition to clean energy.

“China can’t be the only country that produces clean technology for the world we need,” a senior administration official said. “We need diversified, not concentrated, production of our most critical goods and technologies. … That’s the kind of dynamic we think will produce resilient supply chains and clean technology.”

Electric vehicles imported from China will see their tariffs more than quadrupled from 27.5% to 100% – a policy lever meant to challenge Beijing’s practice of encouraging aggressively low pricing by domestic EV manufacturers while levying a 40% tariff on US car imports.

“We’re not going to let China flood our market, making it impossible for American automobile manufacturers to compete fairly,” Biden said on Tuesday.

He added, “Folks, look, I’m determined that the future of electric vehicles will be made in America by union workers, period.”

Chinese manufacturer BYD’s Seagull electric vehicle retails for roughly $10,000, a fraction of what rival American products cost.

“It was important to have a large enough step-up in the tariffs to ensure that we try to level the playing field,” a second senior administration official said.

Beijing has been known to introduce costly counterpunches. Chinese foreign ministry spokesperson Wang Wenbin told reporters Tuesday that China opposes “the unilateral imposition of tariffs which violate (World Trade Organization) rules, and will take all necessary actions to protect its legitimate rights.”

After Trump unveiled his wide-ranging tariff policy, China slapped tariffs on $101.4 billion in US exports, retaliation that the Brookings Institute estimated affected 294,000 American export-related jobs.

Biden acknowledged Tuesday that he expects China will likely retaliate in some way to the newly announced tariffs against Beijing.

“It’s about saving American jobs,” Biden said in an interview with Yahoo Finance posted Tuesday. “I’m sure China will talk a lot about it, but the fact is that China already is … way over their skis on this. I don’t think it’ll lead to any international conflict or anything like that but I think they’ll probably try to figure out how they can raise tariffs maybe on products that are unrelated.”

Responding to news of the impending tariffs, Trump, speaking outside of the New York courtroom where he is standing trial on Tuesday, suggested Biden should have taken these steps at the beginning of his term.

“China is eating our lunch right now,” Trump said outside the courtroom. Asked to respond to Trump’s statement after he signed the tariffs, Biden said his predecessor has “been feeding them a long time.”

The White House has declined to speculate on how Beijing may hit back now. Officials have pointed to parallel investigations by partners in Europe, Brazil and Turkey as bolstering their position.

“China is producing [goods] at a rate and with a trajectory that’s far in excess of any plausible estimate of global demand,” the first senior administration official said.

Treasury Secretary Janet Yellen and Secretary of State Antony Blinken each raised that point with Chinese counterparts during formal visits to the country in April. Administration officials discussed releasing the changes in April to set the stage for a tariff speech Biden delivered mid-month, but ultimately held off to preserve the diplomatic visits, according to two sources familiar with the matter.

On April 17, Biden spoke at the United Steelworkers headquarters in Pittsburgh, calling for a tripling of tariffs Trump placed on certain steel and aluminum products imported from China, and a new investigation into unfair shipbuilding practices. The Chinese government, Biden argued, is providing state money to Chinese steel companies to make more steel than the economy demands, pushing down the price and making it impossible for other companies to compete.

“They’re not competing,” Biden said of China. “They’re cheating.”

It’s a message that plays favorably across the so-called blue wall, the handful of Midwest manufacturing-heavy states that will be critical for either candidate during an election where trade will once again figure prominently.

It played less favorably across the Pacific, with China’s Ministry of Commerce accusing the US of “false accusations” and “wrong practices.”

In a separate executive order issued on Monday, Biden forced MineOne, a Chinese-backed cryptocurrency mining company, to sell its land near the Francis E. Warren Air Force Base in Wyoming. The order said MineOne’s close proximity to the Air Force base raises national security risks due to the company’s use of “specialized and foreign-sourced equipment potentially capable of facilitating surveillance and espionage activities.”

The decision comes amid recent attempts by Washington to limit Chinese companies’ influence on US consumers and national security, especially ahead of the 2024 presidential elections in November.

This story has been updated with additional information.

CNN’s Sam Fossum, Kathryn Monahan and Michael Williams contributed to this report.

The-CNN-Wire
™ & © 2024 Cable News Network, Inc., a Warner Bros. Discovery Company. All rights reserved.