The U.S. Trade Representative’s Office (USTR) finalized high tariffs on imported goods from China on Friday, including tariffs on Chinese electric vehicles, to strengthen protection for strategic industries in the United States from the impact of China’s government-driven overcapacity.
President Biden announced in May a proposed tariff increase on Chinese electric vehicles, semiconductors, batteries, steel, aluminum, solar cells, and critical minerals worth $18 billion. USTR made the final decision on these proposed tariffs on Friday.
In a statement, USTR said, “Most of the proposed modifications announced in May 2024 have been adopted, with several updates made after reviewing over 1,100 public comments to enhance actions to protect American businesses and workers from the impact of China’s unfair trade practices.”
“The tariff increase finalized today is aimed at China’s harmful policies and practices. These policies and practices continue to affect American workers and businesses,” said U.S. Trade Representative Katherine Tai.
USTR also condemned China for its “harmful forced technology transfer behaviors – particularly cyber theft and industrial espionage – which continue to persist and, in some cases, worsen.”
Many tariffs will take effect on September 27, including a 100% tariff on Chinese electric vehicles, a 50% tariff on solar cells, and a 25% tariff on steel, aluminum, electric vehicle batteries, and major mineral products.
The decision from the USTR seen by Reuters first shows that the U.S. will begin imposing a 50% tariff on Chinese semiconductor products in 2025, including two new categories – polycrystalline silicon and silicon wafers used for solar panels.
Tariffs on products such as laptops and mobile phones will come into effect on January 1, 2026.
USTR will raise tariffs on medical masks and surgical gloves from the initially proposed 25% to 50%, but the start of the tariffs will be delayed to allow enough time for a transition to non-Chinese suppliers; tariffs on Chinese syringes will be raised from the previously planned 50% to 100% immediately, but USTR will allow exemption for infant feeding needles for one year.
White House senior economic adviser Lael Brainard told Reuters that this decision was made to ensure diversification in the U.S. electric vehicle industry and to break free from China-dominated supply chains.
She stated that a “tough, targeted” tariff is needed to counter China’s government subsidies and technology transfer policies, which have led to overinvestment and overcapacity. The U.S. is investing billions of dollars in tax subsidies to develop domestic electric vehicle, solar, and semiconductor industries.
“The 100% tariff on electric vehicles really reflects how Chinese electric vehicles are rapidly dominating the automotive markets in other parts of the world, especially with China using highly unfair cost advantages,” Brainard said.