The Biden administration has raised tariffs on Chinese goods

The Biden administration announced measures Friday that would add tariffs on billions of dollars worth of Chinese goods, a move intended to protect American factories and project a tougher China-on-China approach ahead of the presidential election.

Tariffs, which range from 7.5 percent to 100 percent, would apply to clothing, solar panels, electric vehicles, syringes, steel and other products that China sells at much lower prices than many American businesses, threatening to drive out U.S. factories. business

The moves could raise the cost of some imports at a time when Americans are already unhappy with rising prices. But they represent a major effort by the Biden administration to address a key political issue for some voters: America's reliance on China for an array of products.

Both Democrats and Republicans have shied away from emphasizing the benefits of free trade and criticized the role that Chinese imports have played in hollowing out American manufacturing and harming communities centered around those factories. This week, Vice President Kamala Harris spoke about the impact of the tariffs on former President Donald J. Trump has sparred and Republican lawmakers have proposed several new laws aimed at reducing China's economic influence.

One of the measures proposed by the Biden administration would greatly limit trade rules, called de minimis, that allowed more than a billion packages from China to enter the United States last year without being subject to existing tariffs. The administration says the flood of shipments under the rules has hurt American manufacturers and allowed products like fentanyl and counterfeit products to come into the country.

Trade rules allow packages to be shipped from foreign countries directly to consumers or businesses without payment of duty, as long as shipments do not exceed $800 per recipient per day. The new proposal would remove that exemption from a wide range of products and would have a significant impact on major exporters of Chinese goods such as Xin and Temu, two online marketplaces that have become popular with American shoppers.

“The sharp increase in de minimis shipments has made it increasingly difficult to target and block illegal or unsafe shipments to the United States,” said Dalip Singh, deputy White House national security adviser for international economics.

“We are making sure that foreign companies respect our laws and do not put American families in danger,” Mr. Singh added.

The Biden administration on Friday released a long-awaited review of tariffs the Trump administration imposed on more than $300 billion worth of Chinese goods starting in 2018.

The 187-page report concluded that Trump's tariffs were effective in reducing U.S. exposure to harmful trade practices from China and should be maintained. It found that the tariffs encouraged China to take steps to eliminate some of its harmful policies, although reports say such programs do exist.

The report also said the tariffs contributed to US companies shifting their sourcing out of and away from China. China's overall share of US imports fell to 13.7 percent in 2023 from 21.6 percent in 2017.

As part of the review, the Biden administration said it was adding or increasing tariffs on additional goods from China, including electric vehicles, battery parts, medical gloves, graphite, semiconductors and other products. These tariffs will be effective from September 27 The Biden administration put forward some of those additional tariffs in May, but this week's report finalized those measures, as well as proposed additional tariffs on tungsten and solar products.

Catherine Tai, the US trade representative, said in a statement that the tariffs would “target the harmful policies and practices of the People's Republic of China that continue to affect American workers and businesses.”

Liu Pengyu, a spokesman for the Chinese embassy in Washington, said in a statement that the tariffs were “a product of unilateralism and protectionism.”

“China firmly opposes this and will take all necessary measures to protect its own rights and interests,” he said.

The Information Technology Industry Council, a trade association for technology companies, said additional tariffs on chips and other electronics would “cause further disruption and instability in global supply chains.”

The Biden administration has “repeatedly dismissed industry concerns about the economic impact and supply chain resilience in favor of more tariffs,” it said.

Mr Trump's decision to formalize tariffs and add new ones could put Ms Harris in a difficult position given her criticism of the former president's approach to China. Mr Trump has said that, if elected, he would seek to impose higher tariffs on China – as much as 60 per cent – as well as 10 per cent to 20 per cent tariffs on imports from other countries. Ms. Harris dismissed that idea as a “national sales tax.”

In this week's debate, Mr Trump noted that the Biden administration has adopted a similar trade policy, saying: “He's going to visit me now. In fact, I was going to send him a Maga hat.”

Democrats have tried to strike a careful balance to differentiate their trade policy from Republicans, while also trying to appeal to voters who appreciate Mr. Trump's more aggressive trade approach.

The Biden administration's review of Mr. Trump's China tariffs, which took more than two years, has sparked controversy among Biden officials. Some argued for lowering certain tariffs on goods as a way to lower prices on American consumers. But they were dismissed by others who said the US could not ease trade penalties on China.

The Biden administration's additional tariffs on electric vehicles and other products will cover $18 billion in Chinese imports. It's unclear exactly how much trade would be covered by the proposal to close the de minimis loophole, but the change appears to apply to a significant portion of U.S. de minimis imports, which totaled $54.5 billion last year.

The measure, to be finalized after a public comment period, would eliminate minimum treatment for any goods subject to tariffs under various legal provisions, including those the Trump and Biden administrations have used to impose tariffs on metals, foreign solar panels and a global tariff. Huge array of products from China. Those tariff programs cover at least 40 percent of overall U.S. imports, as well as 70 percent of Chinese textile and apparel imports, the administration said.

The de minimis provision stems from a century-old trade law and was originally intended for shipments that would be too insignificant to warrant scrutiny from U.S. customs officials.

But in recent years, online companies like Shayne — and some sellers of Chinese goods on Amazon — have used the provision to gain market share in the United States, shipping cheap clothing and other items directly from Chinese factories to customers' doorsteps. In addition to bypassing tariffs, companies can eliminate costs for warehousing in the US.

According to federal statistics, the number of packages entering the U.S. each year under the de minimis rule will reach more than one billion in 2023, compared to 140 million a decade ago. Importers are not required to provide as much information to U.S. Customs and Border Protection as other packages, raising concerns that it has become a conduit for drugs and unsafe goods.

According to the customs agency, China is the largest source for such packages, sending more than any other country.

House Republicans this week discussed adopting legislation to limit minimis shipments in a package of bills targeting China, but they ultimately couldn't agree on a measure. In recent years, lawmakers in both the House and Senate have proposed legislation to block de minimis shipments.

In a letter to the Biden administration on Wednesday, more than 100 Democratic lawmakers called for the “full range” of its authority to limit de minimis shipments.

On Friday, Representative Jason Smith, Republican of Missouri and chairman of the Ways and Means Committee, claimed credit for the policy. He said Biden's rule mirrored legislation proposed by a Republican congressman and passed by committee this year.

“They say imitation is the highest form of flattery,” he said, “so I'm glad that Democrats in Washington are once again recognizing that the Republicans' tough-on-China trade policy works.”

The Retail Industry Leaders Association, a trade group that includes Home Depot, Target, Dollar General and others, praised the move, saying it would “protect American consumers and disadvantaged American companies,” as well as help authorities prevent nonconforming or dangerous products from entering the market. . United States of America

Both Shin and Temu say that while they use de minimis, it's not the key to their success. A Temur spokesperson said the company was open to changes that helped customers.

Donald Tang, Shin's executive chairman, said in an interview Thursday that he would be “very happy to embrace” the end of de minimis. As long as it's there, “then we're going to use the channel,” he said. But if it's dropped, “then we're going to find different ways to satisfy our customers.”

Both Democratic lawmakers and the Biden administration have suggested that Congress needs to take more steps to more completely end the de minimis exemption.

Groups including the U.S. Chamber of Commerce and shippers such as FedEx and UPS have opposed the de minimis changes proposed by lawmakers. The National Foreign Trade Council, which lobbies on behalf of major importers, has argued that getting rid of de minimis would create more work for Customs and Border Protection and do little to stop illegal substances from entering the United States.

“The only outcome here is a tax increase,” said John Pickel, the agency's senior director of international supply chain policy.

An economic study released in June found that eliminating de minimis entirely would cost American consumers $12 billion to $14 billion.

One of the authors of that study, Yale University economist Amit Khandelwal, said the costs of repealing de minimis would fall disproportionately on low-income people, who his research found buy more from China than wealthier groups.

“Domestic retailers, domestic manufacturers, they will obviously benefit from taxing these imports,” he said. “But there is a cost, and the cost is often hard to see.”