On Tuesday, US President Joe Biden announced that he’s raising taxes on lots of things that come from China, like batteries for electric cars, computer chips, and medical stuff. He said, “I just imposed a series of tariffs on goods made in China: 25% on steel and aluminum, 50% on semiconductors, 100% on EVs, And 50% on solar panels. China is determined to dominate these industries. I’m determined to ensure America leads the world in them,” in a post on X.
I just imposed a series of tariffs on goods made in China:
— President Biden (@POTUS) May 14, 2024
25% on steel and aluminum,
50% on semiconductors,
100% on EVs,
And 50% on solar panels.
China is determined to dominate these industries.
I'm determined to ensure America leads the world in them.
In an other tweet he said, “For years, the Chinese government has cheated by pouring money into Chinese companies which then dump cheap products onto the market, hurting competitors who play by the rules. I’m announcing tariffs that will ensure American workers are not held back by unfair trade practices.”
US China Trade War heats up
This step shows how both Republicans and Democrats are in agreement about the trade fight that began when Donald Trump was president and has carried on into Joe Biden’s time in office, all aimed at China. These fresh taxes, authorized by a law from 1974, will impact $18 billion worth of things being brought in and seem to be driven by Biden’s need to please voters—he’s following the popular belief that China’s economic strategies have taken away American jobs. There’s also worry in the U.S. about China being too powerful in key industries, especially with the rise of new technology and environmentally friendly businesses, as global competition heats up.
US tariffs- “Political” or “economic”
Experts suggested that the tariffs were mostly a gesture, aimed at gaining support during a challenging election season.
They come after months of criticism from former President Donald Trump, who is competing against Mr. Biden for the presidency and has claimed that his opponent’s backing of electric cars would harm the American car industry.
During a meeting with journalists, officials from the White House stated that the decision wasn’t influenced by politics within the country.
They mentioned that Beijing hasn’t shown any willingness to stop practices that hurt the US, like making western companies share their information in a way that could lead to theft, and giving subsidies that let companies make way more products than people actually want.
“They’re flooding the market, it’s not competing – it’s cheating,” Biden remarked on Tuesday.
China responds to Joe Biden
According to Reuters, China’s foreign minister Wang Yi said on May 15 to China’s state broadcaster, CCTV- It is a case of “typical bullying” and “shows that some people in the United States have reached the point of losing their minds. The U.S.’s suppression of China does not prove that the US is strong, but rather exposes that the US has lost its self-confidence and is out of order.”
According to Xinhua news agency, China’s Ministry of Commerce said on Tuesday that China firmly opposes the further increase of additional tariffs on some Chinese goods by the United States, and will take resolute measures to safeguard its own rights and interests.
How will it impact India?
The Global Trade Research Initiative (GTRI), a private economic think tank suggests that if the US increases tariffs on electric vehicles (EVs), batteries, and other tech products, China might start selling these goods in other places, like India. GTRI also mentioned that the higher tariffs on Chinese face masks, syringes, medical gloves, natural graphite, etc. could be a good chance for India to produce them and get profit in the US market.
Conclusion
In conclusion, the recent announcement by US President Joe Biden regarding increased tariffs on various Chinese imports signifies a continuation of the trade tensions initiated during the Trump administration.
The escalating trade tensions between the United States and China have profound implications for global trade and economic stability, sparking concerns across various sectors and regions worldwide. These tensions have evolved from a trade dispute into a broader geopolitical rivalry, impacting not only the two largest economies but also reverberating throughout the interconnected global economy.
One significant concern is the potential for a trade war between the US and China. Both countries have imposed tariffs on each other’s goods in successive rounds of tit-for-tat measures. These tariffs increase the cost of imports and exports, disrupt established supply chains, and raise prices for consumers and businesses in both countries. As these measures escalate, they threaten to undermine global trade flows and economic growth, as well as increase uncertainty for businesses planning future investments and operations.
Moreover, the US-China trade tensions have implications beyond bilateral relations. China is a key player in global supply chains, particularly in manufacturing and technology sectors. Disruptions in trade between the US and China can ripple across the globe, affecting suppliers, manufacturers, and consumers in other countries that are part of these supply chains. This interconnectedness means that a downturn in US-China trade can have far-reaching consequences for countries that rely on both markets for exports and imports.
Furthermore, the uncertainty generated by the trade tensions has already started to impact financial markets. Stock markets around the world have experienced volatility in response to each escalation of tariffs and retaliatory measures between the US and China. Investors are wary of the potential economic fallout, including reduced corporate earnings, lower business confidence, and decreased investment flows.
As the global trade landscape continues to evolve, it is essential for India to adapt its policies and strategies to navigate these challenges and maximize its economic prospects.
