The United States Deputy Treasury Secretary in charge of international affairs, Jay Shambaugh, said on Tuesday (October 1) that the Chinese Communist Party has not retaliated against the United States’ tariff increases on Chinese imports, partially due to the ongoing communication between the two countries.
According to Reuters’ report on Tuesday (October 1), Shambaugh stated on the national financial news program “Marketplace” that recently, Chinese economic officials have shown “more understanding” in discussions with US officials regarding the Biden administration’s decision to significantly raise tariffs on strategic commodities imported from China, including electric cars, lithium batteries, semiconductors, solar panels, steel, and aluminum.
The increased tariffs, which came into effect on September 27, include a 100% tariff on Chinese electric cars, a 50% tariff on solar panels, and a 25% tariff on steel and aluminum. The tariff on semiconductors will be raised to 50% and will take effect on January 1, 2025.
On September 19 and 20, Shambaugh led a delegation from the Treasury Department to visit Beijing. He mentioned that Chinese officials understand that these tariffs are targeted at strategic industries, and the Biden administration is investing in developing American manufacturing.
The tariff increase affects approximately $18 billion worth of imported products, marking the end of a two-year review of the punitive “Section 301” tariffs imposed by the previous President Trump, which will remain unchanged.
Shambaugh also stated that they explained to the Chinese side that the purpose of the tariffs is to persuade China to change its state-dominated economic practices.
Speaking about his Chinese counterparts, he said, “I think when they heard we were going to do a review, they were worried we might make some big moves, change everything in the economic relationship.”
He continued, “I think once we were able to explain to them what we’re doing and why, I would say they have more understanding of what we’re doing, so you haven’t seen a big escalation or retaliation yet.”