China vows to retaliate as Biden raises tariffs
China has vowed on Tuesday to retaliate against the US after President Joe Biden announced increased tariffs on $18 billion of Chinese imports, escalating tensions between the two largest economies, CNN Business reported.
The White House justified the move as a measure to protect American workers and businesses from unfair trade practices by China, including allegations of artificially low-priced exports. These tariffs target electric vehicles, steel, aluminium, semiconductors, solar cells, and medical products.
China’s Commerce Ministry fiercely condemned the new tariffs, stating they contradict President Biden’s prior commitment to avoid suppressing China’s development and decoupling the economies.
The Ministry warned this action would seriously impact the atmosphere of bilateral cooperation.
Electric vehicles imported from China will face the brunt of the tariff hikes, with rates quadrupling from 27.5 per cent to a staggering 100 per cent.
This directly challenges China’s practice of heavily subsidising its domestic EV industry while simultaneously imposing a 40 per cent tariff on imported US cars.
Other targeted goods will see tariffs double (solar cells and semiconductors) or rise to 25 per cent (steel, aluminium, critical minerals, battery components, cranes, and medical products).
China opposes these unilateral tariffs, which violate World Trade Organisation (WTO) rules, declared Chinese foreign ministry spokesperson Wang Wenbin.
He further emphasised China’s intention to take “all necessary actions” to protect its interests.
The move comes amidst concerns about China’s ballooning trade surplus, approaching $1 trillion in recent years.
The US and Europe suspect China is using subsidies to dump excess products on global markets, harming domestic industries in those regions. This issue is expected to be a key point of discussion at the upcoming G7 summit.
Wang refuted claims of China relying on subsidies to gain a competitive edge. He attributed China’s leading position in renewable energy sectors like EVs and solar panels to continued technical innovation, complete industrial and supply chains, and full-on market competition.
The latest tariff hikes mark a significant step backwards and threaten to trigger further retaliatory measures, potentially jeopardizing global economic stability, according to the statement.
