As the November US presidential election approaches, facing former President Trump’s promise to impose tariffs of up to 60% on Chinese products, Politico magazine analyzes that current President Biden has no choice but to take firmer steps on increasing tariffs on China. Otherwise, he may risk losing key battleground states in the election or even lose seats in the Democratic Party in the Senate.
Trump began imposing tariffs on Chinese imports worth over $300 billion in 2018. During the 2020 presidential election, the Biden team promised to reevaluate, reduce, and possibly cancel Trump’s tariffs on China.
However, after Biden took office in 2021, he instead continued and even intensified support for Trump’s tariffs on Chinese goods. Why does the Biden administration seem to have no choice on the issue of tariffs against China?
An experienced trade lawyer in Washington told Politico, “Everyone thought that Biden, after taking office in 2021, would try to negotiate a big deal with China (CCP), abolish (Trump’s tariffs on China), or chip away at (these tariffs) little by little, but we have not seen any movement.”
However, the Biden administration did attempt such a move. As early as 2021, Biden’s National Security Advisor Jake Sullivan hoped to reshape Trump’s tariff policy, including cutting tariffs on thousands of consumer goods from China but raising tariffs on high-tech industries in China such as clean energy and semiconductors to inflict greater damage on the CCP.
This reflects Biden’s strategy, as he has been reluctant to adopt an overarching approach like Trump’s in raising tariffs on China, instead preferring a more targeted approach towards semiconductors and other strategic high-tech products.
Despite these plans, internal opposition within the Biden administration derailed the initiative—Biden’s US Trade Representative Katherine Tai insisted on dialoguing with China first, not wanting to “antagonize” the already tense US-China business relations. Consequently, Sullivan’s tariff reduction plan was put on hold.
In 2022, the US saw rising inflation and skyrocketing inflation rates. Officials from the US Treasury and Commerce departments, as well as major US importers, strongly urged Biden to reduce tariffs on consumer goods. Commerce Secretary Gina Raimondo attempted to address the issue, telling Congress that Biden would reduce tariffs, which was “imaginable.”
Biden has been attempting to strike a balance by displaying a tough stance on China while preserving the bilateral relationship, protecting US employment without causing pain to both countries’ trade.
A senior official from the National Security Council stated that even with increased tariffs on high-tech products, reducing tariffs on consumer goods like bicycles would still make sense.
Many anticipated that in the summer of that year, the Biden administration would decide to reduce Trump’s tariffs on Chinese consumer goods. However, Tai once again strongly opposed this, believing that tariff cuts would not curb inflation but rather anger Biden’s union allies and paint him as weak against the CCP. Biden subsequently stated the need for “further discussion” on the tariff issue with journalists, leading the tariff reduction plan for that year to once again stall and eventually fizzle out.
In November 2022, Biden and CCP leader Xi Jinping met during the G20 summit in Bali, Indonesia, where they pledged to prevent further deterioration of the bilateral relationship, effectively freezing any US tariff actions against China.
By early 2023, hopes were high for a thaw in US-China commercial relations, with the CCP launching a charm offensive in Washington, calling for tariff cancellations to help the US recover from the economic downturn caused by the COVID (CCP virus) pandemic. However, in late January to early February, a CCP high-altitude spy balloon floated over mainland USA from the northwest to southeast, prompting concerns across the US, plunging the already spiraling tensions between the US and China to freezing point.
Months later, the Biden administration once again attempted to mend ties with China, culminating in Xi’s visit to the US-hosted Asia-Pacific Economic Cooperation (APEC) leaders’ summit in San Francisco in November 2023. Cooperation with Asia-Pacific nations and maintaining stability in the trans-Pacific region are key diplomatic priorities for the Biden administration, and the tariff reduction plan on China was once again shelved to avoid damaging relationships with APEC member countries.
With the 2024 election approaching, the Biden administration seems to have decided, driven by Democratic lawmakers in Congress, not to pursue tariff reduction on China but instead increase tariffs.
During a speech to US steelworkers in Pittsburgh last month, Biden called for imposing a 25% tariff on Chinese steel and aluminum products.
It is expected that the Biden administration will announce higher tariffs on key industries in China such as electric vehicles, solar equipment, batteries, and semiconductors on May 14th (next Tuesday).
Currently, Chinese cars are already subject to a 27.5% tariff. In February of this year, the White House announced a new investigation into “connected vehicles” from “countries of concern, including the People’s Republic of China.”
An official familiar with the plan revealed to Politico that there are still heated debates within the Biden administration on what to do, with lingering uncertainties, especially on whether to reduce other tariffs while increasing tariffs on Chinese steel, electric vehicles, and other clean energy product components.
However, Senate Majority Leader (Democrat) Chuck Schumer and Democratic senators from industrial regions in the Midwest have urged Biden to raise tariffs on China without reducing any tariffs as a reprisal to maintain the relationship between the two countries.
In a letter to Biden, they wrote that “any reduction in tariffs would give China (CCP) a competitive advantage over hard-working Americans.” They implied to Biden that reducing tariffs on China could allow Republican presidential candidate Trump to gain more support in swing states like Wisconsin and Pennsylvania, putting Democratic Senate seats there at risk.
With less than half a year until the election on November 5th, Biden seems to have no choice. In terms of trade and tariffs, Biden has shown “immense respect” for the Democratic senators from the Midwest—2024 is a crucial year where the fate of these senators and Biden himself are closely intertwined, and as the election draws nearer, the common challenges they face become unimaginable.
Due to Trump’s pledge to impose higher tariffs—up to 60% on China and 10% on all other countries—Biden has virtually lost any political maneuvering room to retreat, particularly concerning his stance towards Beijing. Meanwhile, like Trump, Biden is also exploring how to counter the influx of Chinese goods through other countries to evade tariffs.
A former Biden official familiar with the negotiations told Politico that even though some within the Biden administration “hoped to see tariff reductions,” this view has been dominated by political considerations.
A prominent Washington trade lobbyist stated that the Biden administration has “painted itself into a corner.” He revealed that following the aforementioned Senate letter, the decision on increasing tariffs on China has been almost finalized, with the White House now ready to announce it.