Biden's new tariffs on Chinese goods are mostly symbolic. Here's why.

New U.S. tariffs on $18 billion in Chinese goods take effect Friday as trade tensions intensify between the world’s two largest economies.

New U.S. tariffs on $18 billion in Chinese goods take effect Friday as trade tensions intensify between the world’s two largest economies.

The tariffs affect 14 categories of Chinese goods including green technology such as electric vehicles, solar panels and EV batteries — sectors that Beijing has prioritized as it tries to dig out from an economic slowdown. But experts say they are mostly symbolic since the U.S. imports relatively few of the affected products directly from China.

For example, the U.S. imports almost no Chinese EVs, largely because of an existing 27.5% tariff that is now increasing to 100%. Similarly, the U.S. imports less than 1% of its steel from China and just over 5% of its aluminum.Lithium-ion batteries, however, are a different story, accounting for about $13 billion of the $18 billion in affected Chinese goods. The proportion of U.S. lithium-ion EV battery imports coming from China has surged in recent years, reaching 70.5% in 2023 as China continues to dominate the supply chain for a fundamental component of electric vehicles.

Similarly, the U.S. has been increasing its Chinese imports of natural graphite, another crucial component of EVs. A 25% tariff on natural graphite from China, the world’s largest producer, has been delayed until 2026, allowing more time to find alternative sources.The U.S. trade deficit with China is at its lowest since 2010 as the U.S. imports fewer goods from China — $427.2 billion worth in 2023, down 20 percent from the year before. Experts say the decline has been driven largely by tariffs that former President Donald Trump imposed in office and that President Joe Biden has mostly maintained and in some cases expanded.

The latest U.S. tariffs are more targeted compared with the Trump tariffs, which affected about $300 billion in Chinese goods, said Chim Lee, a senior analyst on China and Asia at the Economist Intelligence Unit. Biden administration officials have accused China of having industrial “overcapacity” in areas such as EVs, solar panels and lithium-ion batteries, which they worry could lead Chinese manufacturers to flood overseas markets with low-priced products that undercut domestic competitors. 

https://www.nbcnews.com/news/world/china-tariffs-biden-symbolic-industrial-overcapacity-rcna172215

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