US Locks In China Tariff Hikes on EVs, Chips, Steel

Cars are stacked for loading onto a ship for export at the port in Taicang, in Jiangsu Province, China, on July 16, 2024. AFP via Getty Images

Sharp tariff hikes on imports from China, including a 100 percent duty on electric vehicles, will take effect on Sept. 27, the Biden administration confirmed on Aug. 13.

The Office of the U.S. Trade Representative (USTR) confirmed most of the increased rates that the White House had announced in May, with some adjustments to the list.

Beginning on Sept. 27, the tariff on electric vehicles (EV) imported from China will quadruple from 25 percent to 100 percent.

The USTR also confirmed a 100 percent tariff on needles and syringes, 50 percent tariffs on semiconductors, solar cells, face masks, and surgical gloves, and 25 percent tariffs on EV and other batteries, battery parts, critical minerals, steel and aluminum products, and ship-to-shore cranes.

Some of the increases will take effect on Sept. 27, while others will take effect on Jan. 1 of each of the next two years.

Announcing the decision on Sept. 13, U.S. Trade Representative Katherine Tai said in a statement that the tariff increases will target Beijing’s “harmful policies and practices” and “underscore the Biden–Harris Administration’s commitment to standing up for American workers and businesses in the face of unfair trade practices.”

Lael Brainard, the top White House economic adviser, told Reuters that the decision was made to ensure that the U.S. EV industry diversifies away from China’s dominant supply chain.

She said such “tough, targeted” tariffs are needed to counteract China’s state-driven subsidies and technology transfer policies, which have led to overinvestment and excess production capacity. However, Washington is investing hundreds of billions of dollars in its own tax subsidies to develop domestic EV, solar, and semiconductor sectors.

“The 100 percent tariff on electric vehicles here does reflect the very significant unfair cost advantage that Chinese electric vehicles, in particular, are using to dominate car markets at a breathtaking pace in other parts of the world,” Brainard said. “That’s not going to take place here under the vice president’s and the president’s leadership.”

The Biden administration first announced the tariff hikes in May after the USTR—following a four-year review of Trump-era tariffs on Chinese goods—recommended that President Joe Biden keep all the tariffs and add more.

The USTR announced an exemption for ship-to-shore crane imports purchased before May 14, 2024, as long as the cranes enter the United States before May 14, 2026. The office cited feedback from “a number of commenters,” who said it often takes more than two years to fulfill these orders.

As planned, a 50 percent duty on semiconductors from China will take effect on Jan. 1, 2025. Also, 25 percent tariffs on natural graphite, permanent magnets, and non-EV batteries will take effect on Jan. 1, 2026.

The USTR previously proposed a rate of at least 25 percent for face masks and medical gloves and at least 50 percent for syringes and needles.

The tariff rate on face masks will now increase to 25 percent beginning this month, and to 50 percent in 2026.

The rate for medical gloves will be 50 percent in 2025 and 100 percent in 2026.

The rate for syringes and needles will go up to 100 percent this month, although a one-year exclusion was granted for enteral syringes.

The USTR also expanded the machinery exclusion process to include additional types of machines needed for domestic manufacturing.

In May, the USTR tightened exemptions from the tariffs, ending the exclusion of tariff lines in cases in which comments didn’t show that the products were unavailable outside of China or didn’t show that further extension of a tariff could aid efforts to shift sourcing out of China in the near future.

Reuters contributed to this report.