U.S. President Joe Biden
| Photo Credit: Reuters

U.S. President Joe Biden on Tuesday unveiled a bundle of steep tariff increases on an array of Chinese imports including electric vehicles, computer chips and medical products, risking an election-year standoff with Beijing in a bid to woo voters who give his economic policies low marks.

Mr. Biden will keep tariffs put in place by his Republican predecessor Donald Trump while ratcheting up others, the White House said in a statement citing “unacceptable risks” to U.S. “economic security” posed by what it considers unfair Chinese practices that are flooding global markets with cheap goods.

The new measures impact $18 billion in Chinese imported goods including steel and aluminum, semiconductors, batteries, critical minerals, solar cells and cranes, the White House said. The announcement confirmed earlier Reuters reporting.

The United States imported $427 billion in goods from China in 2023 and exported $148 billion to the world’s No. 2 economy, according to the U.S. Census Bureau, a trade gap that has persisted for decades and become an ever more sensitive subject in Washington.

“China’s using the same playbook it has before to power its own growth at the expense of others by continuing to invest, despite excess Chinese capacity and flooding global markets with exports that are underpriced due to unfair practices,” White House National Economic Adviser Lael Brainard told reporters on a conference call.

Even as Mr. Biden’s steps fell in line with Mr. Trump’s premise that tougher trade measures are warranted, the Democrat took aim at his opponent in November’s election.

The White House said Mr. Trump’s 2020 trade deal with China did not increase American exports or boost American manufacturing jobs, and it said the 10% across-the-board tariffs on goods from all points of origin that Mr. Trump has proposed would frustrate U.S. allies and raise prices. Mr. Trump has floated tariffs of 60% or higher on all Chinese goods.

Administration officials said their measures are “carefully targeted,” combined with domestic investment, plotted with close allies and unlikely to worsen a bout of inflation that has already angered U.S. voters and imperiled Mr. Biden’s re-election bid. They also downplayed the risk of retaliation from Beijing.

ALSO READ | U.S. President Joe Biden signs law banning Russian uranium imports

Mr. Biden has struggled to convince voters of the efficacy of his economic policies despite a backdrop of low unemployment and above-trend economic growth. A Reuters/Ipsos poll last month showed Mr. Trump had a 7 percentage-point edge over Mr. Biden on the economy.

Free trade no more

Analysts have warned that a trade tiff could raise costs for EVs overall, hurting Mr. Biden’s climate goals and his aim to create manufacturing jobs.

Mr. Biden has said he wants to win this era of competition with China but not to launch a trade war that could hurt the mutually dependent economies. He has worked in recent months to ease tensions in one-on-one talks with Chinese President Xi Jinping.

Both 2024 U.S. presidential candidates have sharply departed from the free-trade consensus that once reigned in Washington, a period capped by China’s joining the World Trade Organization in 2001.

China has said the tariffs are counterproductive and risk inflaming tensions. Mr. Trump’s broader imposition of tariffs during his 2017-2021 presidency kicked off a tariff war with China.

As part of the long-awaited tariff update, Mr. Biden will increase tariffs this year under Section 301 of the Trade Act of 1974 from 25% to 100% on EVs, from 7.5% to 25% on lithium-ion EV batteries and other battery parts and from 25% to 50% on photovoltaic cells used to make solar panels. “Certain” critical minerals will have their tariffs raised from nothing to 25%.

The tariffs on ship-to-shore cranes will rise to 25% from zero, those on syringes and needles will rise to 50% from nothing now and some personal protective equipment (PPE) used in medical facilities will rise to 25% from as little as 0% now. Shortages in PPE made largely in China hampered the United States’ COVID-19 response.

More tariffs will follow in 2025 and 2026 on semiconductors, whose tariff rate will double to 50%, as well as lithium-ion batteries that are not used in elective vehicles, graphite and permanent magnets as well as rubber medical and surgical gloves.

A step Mr. Biden previously announced to raise tariffs on some steel and aluminum products will take effect this year, the White House said.

A number of lawmakers have called for massive hikes on Chinese vehicle tariffs. There are relatively few Chinese-made light-duty vehicles being imported now. Senate Banking Committee Chairman Sherrod Brown wants the Biden administration to ban Chinese EVs outright, over concerns they pose risks to Americans’ personal data.

U.S. Treasury Secretary Janet Yellen is headed to a China determined to avoid open conflict with the United States, yet the world’s two largest economies still appear to be hashing out the rules on how to compete against each other.

There are tensions over Chinese government support for the manufacturing of electric vehicles and solar panels, just as the U.S. government ramps up its own aid for those tech sectors. There are differences in trade, ownership of TikTok, access to computer chips and national security — all of them a risk to what has become a carefully managed relationship.

The 77-year-old Yellen, a renowned economist and former Federal Reserve chair, laid out to reporters the issues that she intends to raise with her Chinese counterparts during her five-day visit. Ms. Yellen is headed to Guangzhou and Beijing for meetings with finance leaders and state officials. Her engagements will include Vice Premier He Lifeng, Chinese Central Bank Governor Pan Gongsheng, former Vice Premier Liu He, leaders of American businesses operating in China, university students and local leaders.

Ms. Yellen, speaking to reporters Wednesday during a refueling stop in Alaska en route to Asia, said her visit would be a “continuation of the dialogue that we have been engaged and deepening” ever since U.S. President Joe Biden and Chinese President Xi Jinping met in 2022 in Indonesia. She noted that it would be her third meeting with China’s vice premier.

Ms. Yellen recently accused China of flooding global markets with heavily subsidised green energy products, possibly undercutting the subsidies the U.S. has provided to its own renewable energy and EV sector with funds provided by the Democrats’ Inflation Reduction Act. She said she intends to repeat her concerns to Chinese officials that they’re flooding the global market with cheap solar panels and EVs that thwart the ability of other countries to develop those sectors.

“We need to have a level playing field,” Ms. Yellen told reporters. “We’re concerned about a massive investment in China in a set of industries that’s resulting in overcapacity.”

Ms. Yellen didn’t rule out taking additional steps to counter Chinese subsidies in the green energy sectors, adding, “It’s not just the United States but quite a few countries, including Mexico, Europe, Japan, that are feeling the pressure from massive investment, in these industries in China.”

The Treasury secretary’s travels come after Mr. Biden and Mr. Xi held their first call in five months on Tuesday, meant to demonstrate a return to regular leader-to-leader dialogue between the two powers. The leaders discussed Taiwan, artificial intelligence and security issues.

The call, described by the White House as “candid and constructive,” was the leaders’ first conversation since their November summit in California, which renewed ties between the two nations’ militaries and enhanced cooperation on stemming the flow of deadly fentanyl and its precursors from China.

Still, it appears to be difficult for the two countries to strike a balance between competition and antagonism.

For instance, Mr. Xi last week hosted American CEOs in Beijing to court them on investing in China. Meanwhile, Mr. Biden last August issued an executive order that instructed an inter-agency committee, chaired by Ms. Yellen, to closely monitor U.S. investment in China related to high-tech manufacturing.

Jude Blanchette, a China expert at the Center for Strategic & International Studies, said, “the Biden administration’s efforts over the last year to stabilize the relationship are clearly working, but the main friction points all remain unresolved and will likely challenge the relationship for the foreseeable future.”

“For the time being, a managed rivalry’ might be the best we can hope for, given the potentially catastrophic consequences of the relationship really going off the rails,” he said.

Ms. Yellen last week said China is flooding the market with green energy that “distorts global prices,” and plans to tell her counterparts that Beijing’s increased production of solar energy, electric vehicles and lithium-ion batteries poses risks to productivity and growth to the global economy.

China began to broaden its presence in the global economy more than two decades ago, exporting cheap goods that appealed to U.S. consumers at the expense of factory jobs in many of those consumers’ hometowns. Research by the economists David Autor, David Dorn and Gordon Hanson into what’s known as the “China Shock” led to the steady demise of many factory towns, and in some cases led to greater political discontent.

Still, some experts see a benefit in an economic showdown to produce green products.

Shang-Jin Wei, a professor of Chinese business at Columbia University, says that a subsidy war could ultimately help consumers in both countries buy more climate-friendly products, which is an aim of the Biden administration.

“In contrast, a U.S. tariff on EV imports could raise the price of EVs in the U.S. and is therefore counterproductive for the purpose of inducing a green transition.”

Ms. Yellen’s trip will run from April 4 to 9. It’s intended as a follow-up to Ms. Yellen’s travel to China last July, which resulted in the launch of a pair of economic working groups between the two nations’ finance departments to ease tensions and deepen ties.

But this visit falls in an election year, where tough talk on China has increased by Democrats and Republicans — who criticize Chinese ownership of popular social media app TikTok, the nation’s censorship and human rights record and hold a deep mistrust over recent acts of espionage such as hacking and the use of a spy balloon.

Scheherazade S. Rehman, a professor of International Business and Finance and International Affairs at George Washington University, said while “it’s an election year, so all the rhetoric is going to be sharper, the U.S and China are in a symbiotic trading relationship and ultimately need each other.”

China is one of the United States’ biggest trading partners, and economic competition between the two nations has increased in recent years. Yellen stressed Wednesday that the United States has no interest in decoupling from China.

China’s support of Russia as it continues its invasion of neighboring Ukraine is another issue that will come up during the meetings. As the U.S. and its allies sanction Russian officials and entire sectors of the Russian economy, like banking, oil production and manufacturing, trade between China and Russia has increased.