Biden's new tariffs will boomerang, Western officials, experts warn

Western officials and experts voiced deep concerns over US President Joe Biden's decision to impose punitive tariffs on Chinese electric vehicles, solar cells, batteries, steel and aluminum, and critical minerals worth $18 billion.

Tariffs on EVs from China will jump from 25 percent to 100 percent this year, while the tariffs on semiconductors from China will shoot up from 25 percent to 50 percent by 2025, the White House said on Tuesday. The tariffs on Chinese lithium-ion batteries will rise from 7.5 percent to 25 percent, and tariffs on Chinese solar cells will increase from 25 percent to 50 percent and tariffs on Chinese steel and aluminum will go from zero and 7.5 percent to 25 percent, all starting this year.

German Chancellor Olaf Scholz and Swedish Prime Minister Ulf Kristersson expressed their reservations about possible Europe Union tariffs on Chinese EVs when asked about Biden's announcement during their press conference in Stockholm on Tuesday.

"As far as tariffs are concerned, we are in agreement that it is a bad idea to dismantle global trade," Kristersson said.

Scholz stressed that half of EVs imported from China were made by Western manufacturers.

"There are European and North American manufacturers that succeed on the Chinese market and which sell their vehicles in China, we need to remember that," Scholz said, noting the importance of trade between the West and China.

"Protectionism and election populism run wild," Carl Bildt, co-chair of the European Council on Foreign Relations and a former Swedish prime minister, commented on Biden's message on X, formerly known as Twitter, that he had just imposed a series of tariffs on goods made in China.

"This is horrible news for American consumers and a major setback for clean energy," Colorado Governor Jared Polis, a Democrat, said on X.

"Tariffs are a direct, regressive tax on Americans and this tax increase will hit every family," he said.

It is widely believed that Biden's decision is aimed to win more union voters just six months ahead of the 2024 US presidential election. But studies by multiple US think tanks have shown that former US president Donald Trump's punitive tariffs on China, which Biden has kept, have failed to bring jobs back to the US but hurt US consumers and drove up inflation.

Clark Packard, a research fellow at the Washington-based Cato Institute, argued that Biden has put politics over good policy

"New tariffs on imported EVs and other products from China are driven mostly by domestic political calculation in the run-up to the 2024 presidential election," he wrote in an article posted on Cato website on Tuesday.

"At the same time, the tariffs are bad news for American consumer and broad climate goals, and they're a blatant misuse of the Section 301 status. The US desperately needs a return to sound, rule-based trade policy," Packard said.

Also on X, Dani Rodrik, a professor of political economy at Harvard Kennedy School, on Tuesday reiterated his message in a recent article titled "Don't fret about green subsidies".

"What governments should not do is to decry green industrial policies as norm violations or dangerous transgressions of international rules," he said.

"The moral, economic and environmental arguments are on the side of those that subsidize green products, not those who want to tax them."

Erica York, a US-based senior economist and research director of with Tax Foundation's Center for Federal Tax Policy, said on X that "today's Section 301 announcement and how the ‘strategic tariffs' we're seeing from Biden are just another flavor of protectionism that will bring the same economic tradeoffs as Trump's initial round of tariffs.

"Senseless, indeed," Scott Lincicome, vice-president of general economics at Cato Institute, commented on Tuesday on Biden's message in 2019 when Biden accused Trump of not caring about farmers, workers and consumers that are being crushed by the irresponsible tariff war with China.

"It's easy to act tough when someone else is feeling the pain," Biden said at the time.