Image by The White House
On Friday, September 13, the Biden administration finalized the increase of several tariffs on imported Chinese goods. The decision, which was first announced in May of 2024, is a protective measure for domestic businesses struggling to compete with the lower prices of their Chinese counterparts, but it carries the potential for higher taxes and lower employment for American consumers.
The tariffs apply to a myriad of products, including clothing, toys and medical equipment. The highest of them, standing at a formidable 100%, have been placed on Chinese electric vehicles (EV); tariffs on solar cells, lithium batteries and other key EV building materials follow closely behind at 50% and 25%, respectively.
Lael Brainard, the White House’s top economic adviser, said this move is intended to strengthen domestic production of EVs and move the U.S. away from China’s “state-driven” production practices.
“It is important to enforce our trade laws against China’s unfair nonmarket practices to prevent harm to American workers and businesses,” said Brainard in a briefing. “Today’s actions to support U.S. solar manufacturers, which include ending tariff exemptions and monitoring imports from countries found to be circumventing trade enforcement measures, will help ensure that China is not able to undercut U.S. manufacturers simply by moving its factories.”
The tariffs, which have been scheduled to take effect on September 27, were not received well by electric vehicle manufacturers. Many of them are dependent on Chinese suppliers and believe the tariffs will do little to reduce China’s domination of the EV industry.
“[The Biden Administration] has repeatedly dismissed industry concerns regarding economic impacts and supply chain resilience in favor of more tariffs,” said the Information Technology Industry Council, a trade association for technology firms. “Since implementation, the tariffs have cumulatively cost American businesses and consumers $221 billion while failing to alter Chinese trade policies and practices of concern.”
Further opposition to the tariffs came from Liu Pengyu, spokesperson for the Chinese Embassy in Washington, D.C. Pengyu said in a statement that the tariffs were “the product of unilateralism and protectionism” and later posted a report on the United States’ lack of compliance with the World Trade Organization’s “fair trade” rules to his X account.
In addition to the EV industry, the Biden Administration’s increased tariffs would also have a negative impact on online marketplaces such as Shein and Temu. For years, these companies have been able to bypass tariffs and ship directly to consumers due to the “de minimis” trade rule.
“De minimis” states exporters are exempt from paying tariffs as long as their shipments do not exceed $800 per recipient per day. Under the administration’s new measures, the types of products “de minimis” applies to would be drastically reduced, and exporters would be forced to pay tariffs on their shipments.
This change is informed by a serious uptick in illicit drugs and counterfeit goods brought into the United States over the past year. Daleep Singh, the deputy White House national security adviser for international economics, stated that “de minimis” has made it “increasingly difficult to target and block illegal shipments.”
By limiting its scope, the Biden Administration hopes to reduce the amount of dangerous products brought into the country. At the same time, it will result in higher prices for American consumers on Chinese products.
It’s evident that the Biden Administration’s new financial policies affect not just large companies and industries but also all American citizens. The Tax Foundation, a non-Partisian research think tank, estimates that increased tariffs will reduce long-run GDP by 0.2%, employment by 142,000 jobs, and taxes by $3.6 billion.
It is important to note that these tariffs are not solely the work of the Biden Administration — many are a continuation and expansion of policies first enacted by former President Donald Trump.
Friday’s decision was handed down alongside the long-awaited publication of a report on the Trump Administration’s tariff policies, colloquially referred to as “Trump Tariffs.” The report found Trump Tariffs effective in reducing U.S. reliance on Chinese markets, citing a drop in China’s overall share of U.S. imports from 21.6% in 2017 to 12.7% in 2023. It concluded that the tariffs contributed to U.S. companies “shifting their sourcing out of and away from China,” adding that they should be maintained.
Despite the report’s findings and the shared policies of both administrations, presidential candidates Kamala Harris and Donald Trump clashed over the issue during their debate on Tuesday, September 10.
When Trump stated his plan to raise tariffs — 10% on all imported goods and 60% on ones imported from China — Vice President Harris called it a “sales tax on American households.” Trump then pointed out that the Biden Administration planned to do the same thing and claimed Harris had “gone to [his] philosophy now,” implying she was a hypocrite.
“In fact, I was going to send her a MAGA hat,” the former president joked onstage.
It’s evident that, regardless of who takes office in January, tariffs will be levied upon American citizens. They are no longer simply an issue of reducing China’s influence in the U.S. or diversifying away from certain markets: tariffs are the precariously thin line between protecting domestic interests and hurting American consumers.
Whichever side the U.S. ends up on, though, depends entirely on which is more important to policymakers.