The Biden administration imposed tariffs on imported goods from China, and the American business community repeatedly expressed dissatisfaction.
On the 14th, the United States released the results of the four-year review of China’s imposition of tariff 301, announcing that on the basis of the original tariff 301, it would further impose tariffs on electric vehicles, lithium batteries, photovoltaic cells and other products imported from China.
After the news came out, many business people and business groups in the United States expressed their dissatisfaction.
In a statement to CBN, u.s.-china business council, a group of 270 American companies doing business in China, expressed disappointment with the results of the four-year Section 301 investigation announced by the Office of the US Trade Representative (USTR).
USCBC said: "We are disappointed with this result, because maintaining the previous tariffs (without lowering them) and imposing additional tariffs will eventually make it more difficult for American companies to compete at home and abroad. This will lead to fewer jobs in the United States. In the context of continued inflationary pressures, this will also raise the US consumer price index. "
Earlier, China’s Foreign Ministry spokesperson Wang Wenbin said at a regular press conference on the 15th that according to Moody’s company’s calculation, American consumers bear 92% of the cost of levying tariffs on China, and American families increase their expenses by $1,300 a year.
Liu Bin, a researcher at university of international business and economics School of Government Administration and China World Trade Organization Research Institute, said in an interview with China Business News that (compared with Trump’s tariffs on China), we can see that the industries and products subject to tariff increase are relatively concentrated, and the tariff collection quota has been greatly adjusted. For emerging industries, especially new energy vehicles, the United States has a strong intention to restrict or restrict development.
American consumers pay the bill?
On 14th, KenGriffin, American billionaire and founder of Citadel, said at a forum in Qatar: "Imposing high tariffs on China electric vehicles with low price and high quality, which are beneficial to American consumers, is another manifestation of the discontinuity of Biden’s economic strategy."
The National Retail Federation (NRF) is also "very disappointed" with the Biden administration’s move, and said that "as consumers continue to fight inflation, the last thing the (US) government should do is to impose additional taxes on imported products, which will be paid by American importers and ultimately American consumers".
Recently, Goldman Sachs said in a report that "tariffs in 2018-2019 have significantly increased consumer prices" and that these price increases were "almost entirely borne by American enterprises and families", not China exporters.
Goldman Sachs estimates that every one percentage point increase in the effective tariff rate will directly reduce the gross domestic product (GDP) of the United States by 0.03%, increase consumer prices by 0.1% and keep inflation rising for one year.
Sweet, chief American economist at Oxford Economic Research Institute, said that the political significance of tariffs is usually greater than the economic significance.
Sweet said: "Most economists think that tariffs are a bad idea, because tariffs will hinder a country from benefiting from specialization, disrupt the flow of goods and services, and lead to improper allocation of resources. When implementing tariffs, consumers and producers often have to pay higher prices. "
The new york Federal Reserve also found that tariffs in 2018 cost American families $419 a year due to increased tax burden and loss of market efficiency. The researchers estimate that this figure has doubled as other tariffs take effect in 2019.
Economists wrote in a working paper published by the National Bureau of Economic Research in January 2024 that the net economic impact of import tariffs, retaliatory tariffs and agricultural subsidies on American employment and enterprises is "at best ‘ Rinse ’ Look, and it may be a slight negative impact. "
The above-mentioned researchers said in this working paper that trade friction does seem to bring political benefits and strengthen the support of the Republican Party in the heartland of the United States and the communities most affected by tariffs. "Residents in areas protected by tariffs are unlikely to identify themselves as Democrats, and they are more likely to vote for Trump. Therefore, despite the high economic cost of tariff protection, voters seem to have given a strong response. "
American industry demands competition.
Recently, U.S. Treasury Secretary Yellen frequently appeared in the media to explain the tariff increase policy, but during the interview, she also repeatedly faced questions about whether the tariff increase would drive up prices, including "China’s electric cars are cheaper, so if more people (in the United States) buy them, wouldn’t it help solve the climate change problem".
In this regard, Yellen explained that with the accumulation of experience in producing these products by American companies and the development of newly built battery factories in the central and western regions, the price of automobiles will drop.
However, I am afraid that the industry has different views. CarlosTavares, CEO of Stellantis, a global automobile manufacturer, said that raising tariffs would not protect his company. He believes that "the only choice is to continue fighting", so the only way to compete fairly is to reduce costs and provide electric vehicles at more affordable prices.
In fact, there have been many cases before that prove that imposing high tariffs cannot promote the development of domestic enterprises in the United States.
In 2002, the United States imposed tariffs on imported steel and aluminum products. Subsequent studies showed that although this only caused economic losses of about $30 million, it led to an increase in the price of the steel consumption industry in the United States, and led to a sharp decline in employment opportunities in the entire steel industry, especially those small enterprises that did not have market power to influence prices.
In 2009, the United States imposed tariffs on tires imported from China. The Peterson Institute for International Economics found that this move was thought to have saved about 1,200 jobs in the tire manufacturing industry in the United States, but it cost Americans $1.1 billion in the form of rising prices.
A veteran who has been engaged in the import and export industry in the United States for a long time told the First Financial Reporter that in his view, the United States’ practice of adjusting tariffs this time is more posturing than actual impact.
Taking the solar panel products he is very familiar with as an example, he told reporters that before this adjustment, the solar panels imported by the United States from China had been greatly reduced due to anti-dumping duties: most of the solar panels on the American market were imported from Viet Nam or Thailand, and very few were directly imported from China. In fact, since last year, thousands of containers of related enterprises in China have been detained at the American terminal, and related enterprises may have paid millions of dollars in yard fees at the terminal. The current policy of the United States clearly shows that in order to enter the American market, these companies must set up factories in the United States.
However, in view of some cases that have happened, the prospect of setting up factories in the United States is not optimistic. "If the United States does block the import channels from Vietnam, I can’t imagine where American solar panels will be imported. But it seems unrealistic to rely on solar panels produced locally in the United States. " He added that many media in the United States have also questioned this, and they don’t understand why the import of clean energy products from China should be prevented, especially in the context that the US government has been advocating these clean energy technologies.
Cui Fan, a professor in the Department of International Trade of university of international business and economics Institute of International Economics and Trade, also told China Business News that Biden’s government has begun to contain the overseas investment of China Photovoltaic.
He explained that on April 24, the United States began the photovoltaic double-reverse investigation procedure for Vietnam, Cambodia, Malaysia and Thailand. It is expected that the preliminary ruling will be made this year and the final ruling will be made in the middle of next year. At present, the dumping margin of the four countries listed in the application for investigation ranges from 70.35% to 271.45%, which once blocked the photovoltaic exports of the four countries to the United States.
What needs to be noted is that after the United States announced the imposition of tariffs on China, the EU side, which is conducting countervailing investigations on China’s electric vehicles, is more cautious.
In an interview with China Business News, Liu Bin said that the US tariff increase on China may have a demonstration effect on the EU. However, unlike the United States, the trade links between China and Europe are closer, and the EU is more dependent on the China market.
Liu Bin said that at the same time, China’s new energy vehicles have entered the EU market, which has a "first-Mover advantage". Therefore, it is unlikely that the EU will adjust tariffs on a large scale and in a high amount like the United States. However, the EU may stand in a higher position and adjust taxes in the name of environmental protection.