China Pledges to Take Resolute Measures after US Hikes Tariffs on EV and Other Strategic Sectors

TMTPost-- China issued stern warnings after U.S. government decided to hike tariffs on imports of electric vehicles (EVs) and other strategic sectors from China on Tuesday.

Credit：China News Service

China firmlyopposed the United States' tariff hikesand has lodged stern representations against the move, according to remarks of a spokesperson released at website of the Ministry of Commerce of China (MOFCOM). With its domestic political considerations, the U.S. government abused the Section 301 tariff review process to further raise the Section 301 tariffs on some Chinese products, which is a classic example of political manipulation, and China expressed strong dissatisfaction with such action, the spokesperson said. The spokesperson added the WTO has already ruled those tariffs against WTO rules, however, instead of making corrections,the United States maintained its wrong way and chose to double its fault.

Raising the Section 301 tariffs violates U.S. President Joe Biden's commitment to “not seek to suppress and contain China's development”and “not to seek to decouple and break links with China”,its also contradicts consensus reached by the two heads of state and will seriously affect the atmosphere of bilateral cooperation, said the spokesperson. The spokesperson urged the U.S. to immediately correct its wrongdoing and remove the additional tariffs imposed on China. “China will take resolute measures to defend its own rights and interests,”the spokesperson said.

The serious warning came after the White House announced Tuesday President Biden directed his Trade Representative to increase tariffs under Section 301 of the Trade Act of 1974 on $18 billion of imports from China. It said that the actions, following an in-depth review by the United States Trade Representative, are taken to protect American workers and American companies from China’s unfair trade practices.”To encourage China to eliminate its unfair trade practices regarding technology transfer, intellectual property, and innovation, the President is directing increases in tariffs across strategic sectors such as steel and aluminum, semiconductors, electric vehicles, batteries, critical minerals, solar cells, ship-to-shore cranes, and medical products,”the White House said at its statement.

According to the statement, the Biden administration will sharply ratchet up tariffs on semiconductors, EVs,EV batteries, battery parts, solar cells and steel and aluminum, and impose new tariffs on cranes and medical products. The tariff rate on EVs under Section 301 will increase to 100% in 2024, quadrupling the current tariff of 25%. The tariff rate on semiconductors will increase from 25% to 50% by 2025. The tariff rate on lithium-ion EV batteries will increase from 7.5%% to 25% in 2024, while the tariff rate on lithium-ion non-EV batteries will increase from 7.5% to 25% in 2026. The tariff rate on battery parts will increase from 7.5% to 25% in 2024. The tariff rate on certain steel and aluminum products under Section 301 will increase from 0–7.5% to 25% in 2024. The tariff rate on solar cells (whether or not assembled into modules) will increase from 25% to 50% in 2024.The tariff rate on ship-to-shore cranes will increase from 0% to 25% in 2024. The tariff rates on syringes and needles will increase from 0% to 50% in 2024.

Prior to the White House’s announcement, Chinese Foreign Ministry spokesperson Wang Wenbin commented on the report about tariffs earlier Tuesday. Wang said China opposes unilateral tariffs that violate WTO rules and will take all measures necessary to defend our legitimate rights and interests. As to US Treasury Secretary Janet Yellen’s repeated mention of the so-called “Chinese overcapacity” in EVs and other new energy sectors, Wang reiterated the rapid growth of China’s new energy industries including EVs are built on continuous tech innovation, full-fledged industrial and supply chains and full market competition. Our leading edge is a result of comparative advantage and the laws of the market combined, not by so-called “subsidies”, said Wang, adding that fast-growing Chinese new energy industries meet the world’s needs for green transition and serve the interest of China, the US, and the whole world.