US President Joe Biden recently announced a series of trade tariffs on Chinese imports, including electric vehicles (EVs), lithium-ion batteries, certain types of magnets, critical minerals, steel, and aluminum. These tariffs are part of the administration’s efforts to protect American workers and businesses from losing manufacturing jobs to unfairly subsidized production abroad and from becoming excessively reliant on an adversarial power for modern technologies.
The tariffs aim to safeguard the US auto industry’s competitiveness as it shifts toward electrification. They impose a 100 percent fee on Chinese EVs to prevent potential market saturation. The tariffs are also designed to encourage US car manufacturers to source components, including magnetic motors, batteries, and some critical minerals, from non-Chinese suppliers.
The policy serves as a political signal of Washington’s current direction, particularly in reaffirming the Biden administration’s preference for domestically produced EV batteries as opposed to cheaper Chinese alternatives. However, the tariffs aren’t comprehensive and don’t cover every area where the United States is deeply reliant on Chinese imports.
The point of the tariffs is to make Chinese clean energy technologies more expensive, which slows their deployment and gives the United States time to catch up to the Chinese market leaders. However, analysts do not expect a major economic impact, assuming Beijing does not retaliate significantly.
Beijing has warned it would take resolute measures to defend its interests. Policymakers could target industries in US swing states to impact Biden’s election chances or opt for a symbolic retaliation. China’s response, or lack thereof, will be telling in terms of how officials plan to address acts they deem as economic suppression moving forward.
Read more: fortune.com