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U.S. postpones tariffs on Chinese electric vehicles, other imports

2024-08-01

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[Global Times reporter Ding Yazhi] Two days before the new 301 tariffs imposed by the United States on China officially took effect, the Office of the United States Trade Representative (USTR) issued a statement on July 30 that the measures to impose large tariffs on a series of imported products from China, including electric vehicles and their batteries, which were originally scheduled to take effect on August 1, will be postponed for "at least two weeks." The Nikkei reported on July 31 that this move was because there were voices in the United States calling for a postponement of some products, and the United States needed more time to coordinate opinions.

The United States has imposed tariffs on a large number of Chinese goods since the Trump administration in 2018. In May this year, the United States released the results of the four-year review of the 301 tariffs on China. US President Biden decided to continue to retain the tariff policy implemented by his predecessor Trump's administration and significantly increase tariffs on China's "target strategic products", including increasing the import tariff on Chinese electric vehicles from 25% to more than 100%, and doubling the tariff on semiconductors to 50%. The new import tariff rules for electric vehicles and their batteries, semiconductors, steel and aluminum products and a series of other products were originally scheduled to take effect on August 1 this year.

USTR issued a statement on July 30, saying: "On May 28, 2024, USTR proposed certain modifications to the actions in the '301 Investigation' initiated by USTR into China's acts, policies and practices related to technology transfer, intellectual property and innovation. In response to the May 28 announcement, USTR received more than 1,100 comments from the public. In consultation with the Section 301 Committee, USTR continues to review all comments and expects to issue a final determination in August 2024. USTR expects that the 2024 modifications will take effect approximately two weeks after it publishes its final determination."

The Biden administration's decision to impose additional tariffs has been criticized by the International Monetary Fund (IMF) and other parties, and is believed to be likely to damage global trade and economic growth. On May 16, the IMF criticized that in the worst case scenario, global gross domestic product (GDP) could decrease by about 7%. According to a report by the Nikkei on July 31, relevant industry groups in the United States expressed strong opposition to the increase in tariffs, especially around port cranes.

The original 0% tariff on port cranes will be increased to 25%. The American Association of Port Authorities (AAPA) called in July that there are no companies in the United States that can manufacture large cranes. If Chinese-made cranes cannot be imported, "it will seriously damage port efficiency and throughput."

The association said that before the announcement of the tariff increase, the United States had ordered a total of 35 cranes from China. Since there is no alternative supplier, if the tariff is raised in August, it will lead to an increase in costs of at least $131 million, so it requested an extension. Reuters also quoted the Port Authority of New York and New Jersey on July 30 as saying that tariffs will "place significant pressure on the limited resources of ports."

In response, China's Ministry of Commerce said that the US abused the 301 tariff review procedure for domestic political considerations and further increased the 301 tariffs on some Chinese products, politicizing and instrumentalizing economic and trade issues. This is a typical political manipulation, and China expresses strong dissatisfaction with this. The WTO has long ruled that the 301 tariffs violate WTO rules. Instead of correcting it, the US has insisted on its own way and made one mistake after another. The US should immediately correct its wrong practices and cancel the tariff increase measures on China. China will take resolute measures to defend its own rights and interests.