US industry seeks easing of steep tariff hikes on Chinese imports

Washington — The Biden-Harris administration this week is expected to announce final implementation plans for steep tariff increases on certain Chinese imports, and if US industry gets its way, many of the planned duties would be softened.

Manufacturers from electric vehicles (EVs) to electric utility equipment have asked for the higher tariff rates to be reduced, delayed or abandoned, and for potential exclusions to be greatly expanded.

President Joe Biden in May announced a quadrupling of tariffs on Chinese EVs to 100% and a doubling of duties on semiconductors and solar cells to 50%, as well as new 25% tariffs on lithium-ion batteries and other strategic goods including steel to shield US firms from excess Chinese production.

The White House said initially the new tariffs would take effect on August 1 but that was delayed until some time in September as the US trade representative’s office studied more than 1,100 public comments. A final determination is due by the end of August.

Whether to ease the tariffs is the administration’s first major trade decision since vice-president Kamala Harris emerged as the Democratic Party’s presidential nominee after Biden stepped aside in late July.

The decision is politically tricky. Dialling back the duties could draw criticism from Republicans that Harris will take a softer stand on Chinese trade in a campaign where Trump has vowed to hit Chinese imports with hefty tariffs. Proceeding with the original hikes would draw complaints about higher costs, even from some Democrats in Congress.

China has vowed to retaliate against the “bullying” tariff hikes and foreign minister Wang Yi said they showed that some in the US may be “losing their minds”.

The US decision will come in the same week that US national security adviser Jake Sullivan will meet Wang in a visit aimed at keeping US-China tensions in check with the November election fast approaching.

The Biden-Harris tariffs include a new 25% levy on Chinese-made ship-to-shore cranes, a Chinese-dominated sector with no US producers. The Port of New York and New Jersey said it had eight cranes on order from China’s state-owned ZPMC at $18m apiece. A 25% tariff would boost the cost of each by $4.5m, “causing a significant strain on the port’s critical and limited resources”.

Democratic senators Tim Kaine and Mark Warner from Virginia and Raphael Warnock and Jon Ossoff from Georgia also raised concerns about the effect on ports in their states, calling for existing orders for Chinese cranes to be exempted.

Warnock and Ossoff also urged the trade office to reconsider the planned 50% tariff on syringes, saying they could disrupt supplies for those used to feed newborns.

Ford Motor asked the trade representative’s office to reduce proposed tariffs on artificial graphite, a key material used in the production of anodes for EV batteries. Ford said it still “almost exclusively” used Chinese secondary-particle graphite.

Autos Drive America, a group representing foreign-brand vehicle makers, called for tariff rates on batteries, modules, cells and critical minerals to be kept stable to at least 2027 to allow manufacturers to “fulfil investments in US production and to bolster consumer adoption” of EVs.

But some companies urged more extensive section 301 tariffs, including for Chinese-made steel, which Biden proposed to increase to 25% from 7.5%.

Finnish stainless steelmaker Outokumpu, which operates a mill in Alabama, said it supported the increase and wanted it extended to all steel products melted and poured in China and processed in other countries, such as Vietnam, to curb tariff circumvention. The steelmaker also said the higher tariffs should extend to other stainless steel categories, such cutlery, and refrigeration and brewery equipment.

Reuters