Joe Biden and Xi Jinping
The Biden administration is on the verge of unveiling a decision on tariffs against China as early as next week. The tariffs will be imposed on key strategic sectors, in contrast to Donald Trump's plan for widespread increases on all Chinese imports, according to sources familiar with the matter.
Strategic Tariffs on Key Sectors
The decision marks the culmination of a Section 301 tariff review that began under Trump in 2018. The new tariffs will target industries such as electric vehicles, batteries, and solar panels, while largely maintaining existing levies. The official announcement is expected on Tuesday, said two of the sources.
Impact and Reactions
Although the decision could be delayed, it represents one of Biden's major moves in the economic race with China. It follows his request last month to increase tariffs on Chinese steel and aluminum, and the formal launch of a new investigation into China's shipbuilding industry.
The news weakened the yuan, while China's CSI 300 stock index fell as much as 0.6% earlier before recovering.
"It will certainly make investors think about which stocks are potentially exposed," said Xin-Yao Ng, chief investment officer at abrdn. He added that many green technology brands, such as battery giant Contemporary Amperex Technology Co. Ltd., already have limited exposure to the U.S. "Everyone knows it's a risk."
China's Response
The Chinese Foreign Ministry stated that Trump's tariffs "seriously disrupted" economic and trade exchanges between the two countries. It urged Washington to lift the restrictions and stated that China will take measures to defend its rights and interests.
"Instead of correcting its wrong practices, the U.S. continues to politicize economic and trade issues," said Ministry spokesperson Lin Jian at a briefing on Friday. "Further tariff hikes only make things worse."
Global Concerns and Actions
President Xi Jinping's strategy of boosting production to counter economic slowdown in the country has raised alarms abroad. Leaders in the U.S. and the European Union have criticized Beijing for state aids they claim have fueled a flood of cheap exports threatening jobs in their respective markets. The EU initiated an investigation in October into subsidies for electric vehicles that could lead to additional tariffs by July.
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