After Biden's Hiking Tariff on China, Chinese Pushed Back

After days of information about tariffs, the White House finally rolled out the document. These trade restrictions target not only Chinese high-end manufacturing, such as electric vehicle (EV) batteries and computer chips, but also medical products, solar cells, and cranes. The tariffs on Chinese EVs have been quadrupled to over 100%, and the duties on semiconductors have reached 50%. In response, the Chinese Ministry of Commerce quickly pushed back, stating that the tariffs "will seriously affect the atmosphere of bilateral cooperation." This afternoon, the Chinese Foreign Ministry also issued a statement, asserting that the tariffs "will only significantly raise the cost of imported goods, forcing American businesses and consumers to bear more losses and making American consumers pay a higher price." The ministry further vowed to "take all necessary measures to defend its own rights and interests."

Yet, the harm of the tariff is more symbolic than actual, for now. The new measure only affects approximately $18 billion in Chinese goods, which represents about 4% of the goods the U.S. imports from China in 2023. Additionally, the U.S. imported only 12,362 Chinese EVs in 2023. Some Chinese experts believe that Biden's new tariffs are merely an attempt to bolster his electoral prospects in swing states, particularly in Rust Belt states like Michigan, which is a key hub for automotive production in the U.S. According to FiveThirtyEight, Biden has been trailing in Michigan since March.

This might sound a little bit cynical, but it just reminds me of a conversation from Yes, Prime Minister.

Sir Humphrey: Bernard, what is the purpose of our defence policy?

Bernard: To defend Britain.

Sir Humphrey: No, Bernard. It is to make people believe Britain is defended.

Bernard: The Russians?

Sir Humphrey: Not the Russians, the British! The Russians know it's not.

Maybe we can make a new version of it.

What is the purpose of these new tariffs?

To strengthen the American economy.

No. It is to make people believe the American economy is being strengthened.

The Chinese?

Not the Chinese, the American voters! The Chinese know it’s not.

Here, I’ve also attached the full statement of two Chinse departments

Ministry of Commerce’s:

China firmly opposes and lodges solemn representations over 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, the country's Ministry of Commerce said on Tuesday.

On top of existing tariffs under Section 301, the United States on Tuesday decided to raise additional tariffs on its imports of Chinese products including electric vehicles, lithium-ion batteries, solar cells, critical minerals, semiconductors, steel and aluminum, and cranes.

China is strongly dissatisfied with the U.S. abuse of the Section 301 tariff review procedure driven by domestic political concerns and its increase of additional tariffs on certain Chinese products, a spokesperson for the Ministry of Commerce said in a statement.

This move politicizes trade issues and uses them as a tool, the statement said, calling it "typical political manipulation."

The World Trade Organization (WTO) has already ruled that the Section 301 tariffs are in violation of WTO regulations, yet the U.S. side has continued its wrongdoing, it said.

The U.S. tariff hike goes against the consensus reached by the leaders of the two countries and the promises of U.S. President Joe Biden, and will seriously affect the atmosphere of bilateral cooperation, said the statement.

The U.S. side should immediately rectify its wrongdoing and remove the additional tariff measures against China, it said.

Chinese Foreign Ministry:

The U.S. continues to politicize economic and trade issues. Further increasing tariffs on China is a mistake on top of a mistake. It will only significantly raise the cost of imported goods, forcing American businesses and consumers to bear more losses, and making American consumers pay a higher price. According to estimates by Moody's, American consumers have borne 92% of the costs of the additional tariffs on China, with U.S. households incurring an additional $1,300 in annual expenses. The U.S.'s protectionist measures will also cause greater disruption to the security and stability of global supply chains. We have noted that several European officials have stated that imposing tariffs is the worst option for global trade. We urge the U.S. to genuinely adhere to the rules of the World Trade Organization and immediately cancel the additional tariffs on China. China will take all necessary measures to defend its own rights and interests.