Biden Ups Ante in Anti-China Trade War

In a major escalation of the trade war between the US and China, the Biden administration has decided to implement and increase tariffs across a range of Chinese-made goods.

The most provocative move is the increase of the electric car tariff from 25% to 100% in response to China’s increasing dominance of the sector. But don’t be fooled; the measures are much more than symbolic.

The changes include a 25% tariff on steel and aluminium products, an increase of semiconductor tariffs from 25% to 50%, and from 25% to 50% tariffs on basic medical supplies: syringes, gloves, masks and other PPE.

All this obviously marks a deterioration in international relations between the two powers. But perhaps even more significant is the move to block Chinese products that are driving the net zero transition.

Tariffs on the basic products to outfit the clean energy transition are going from between 0% and 7.5% to 25% with this change. This includes batteries, magnets, graphite and all other critical minerals for electrification. 

Moreover, the solar panel tariff is being raised from 25% to 50%. This latter is particularly needless, as China has already blown away the competition in becoming the world’s sole solar cell manufacturer. 

In 2022, 90% of all global investment in manufacturing facilities related to the net zero transition was made in China, and more than 90% of solar panels are made in China. So this new tariff is simply a tax that will favour further hydrocarbon use.

Advocates for clean energy and climate action have low touted net zero as a business opportunity. These tariffs show that it is now much more about the business opportunity than about reducing carbon emissions as quickly as possible.

After a couple of years of mounting climate optimism, the net zero transition has met a new and major obstacle.

Thumbnail image courtesy @likeakid and article image courtesy @chuttersnap, both via Unsplash.

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