US raises tariffs on Chinese goods, India may gain

The US will raise the tariff on Chinese electric vehicles (EVs) from 25% to 100% in 2024.
Image used for representational purposes only.
Image used for representational purposes only.Express Illustrations

NEW DELHI: In an election-year move, US President Joe Biden-led administration has decided to slap new and increased tariffs on Chinese electric vehicles, semiconductors, lithium batteries, solar cells, steel, aluminium and medical equipment to appeal to US voters.

This move, aimed at creating manufacturing jobs in the US and improving its competitive advantage, may spark a fresh trade war between the two economies.

“Biden is directing his Trade Representative to increase tariffs under Section 301 of the Trade Act of 1974 on $18 billion of imports from China to protect US workers and businesses,” said a White House statement on Tuesday.

The US will raise the tariff on Chinese electric vehicles (EVs) from 25% to 100% in 2024.

“With subsidies and non-market practices leading to risks of overcapacity, China’s exports of EVs grew 70% from 2022 to 2023. A 100% tariff rate on EVs will protect US manufacturers from China’s unfair trade practices.”

It comes at a time when US EV makers are facing increased competition from Chinese firms such as BYD in international auto markets. There is a rush among countries to secure their semiconductor needs.

The tariff rate on Chinese semiconductors in the US will go up from 25% to 50% by 2025, while on certain steel and aluminium products, the tariffs will be jacked from 0–7.5% to 25% in 2024.

The tariff on lithium-ion EV batteries will increase from 7.5% to 25% in 2024. On solar cells, it will go up from 25% to 50% in 2024, on ship-to-shore cranes (0% to 25% in 2024) and on syringes and needles (0% to 50% in 2024).

The Global Trade Research Initiative (GTRI) said this move may have a significant impact on India.

“The raising of tariffs on EVs, batteries and many other new technology items by the US may push China to dump these products in other markets including India. It’s a moment for India’s Directorate General of Trade Remedies (DGTR) to remain vigilant,” said GTRI.

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The New Indian Express