San José, CA – On Friday, September 13, the Biden administration announced a further escalation of the U.S. trade war with China. Tariffs—taxes on imports—of electric cars from China will be increased to 100%. This is meant to protect legacy U.S. auto makers from competition from Chinese electric vehicle or EV manufactures.

A new 25% tariff on lithium ion batteries as well as components and raw materials for lithium batteries for EVs will go into effect at the end of September, while lithium batteries, components and raw materials for all other uses such as electric scooters, power tools and toys will go into effect in 2026.

A 50% tariff will be placed on imports of Chinese semiconductors. Ironically, China’s semiconductor industry is growing in part because the United States is strong-arming U.S. and foreign chip makers to stop selling chips to China. China has become the world’s leader in producing materials for solar power, and Chinese polysilicon and silicon wafers will also face a 50% tariff.

A wide variety of imports from China, ranging from protective personal equipment (PPE) such as face masks and medical gloves, to ship-to-shore cranes used to load and unload container ships, to steel and aluminum, will face tariffs of no less than 25%.

Last but not least, the Biden administration is calling for the elimination of the “de minimus” exemption that allows packages with value of less than $800 to be exempt from tariffs. This will impact major e-commerce firms such as Amazon as well as new Asian firms such as Temu and Shein, all of which rely on shipping direct from China.

While the Biden administration said that the tariffs were in response to “harmful policies and practices” of China, the fact is that China has just pulled ahead of the United States in a number of industries. The CEO of Ford Motors has called Chinese EVs an “existential threat” because of their ability to offer better technology at lower prices than U.S. car corporations.

The tariffs on PPE are a threat to the health of Americans. During the pandemic, shortages of PPE were widespread in the United States due to the lack of American production. Even after the pandemic, rather than relying on subsidies for production and direct purchases by the Federal government to guarantee demand and stockpile health care essentials, the government would rather make them more expensive which will reduce their use and make Americans' health care even more expensive.

Tariffs are a type of sales tax that fall on imports. Since sales taxes are regressive—that is, their burden falls more heavily on lower-income households—the Biden administration tariffs will do the same. This is especially true if the government eliminates the de minimus ban which mainly fall on more inexpensive consumer goods bought by working and poor people.

Other tariffs on so-called “intermediate goods” that are used in production, such as batteries as well as polysilicon and silicon wafers, will make U.S. made products more expensive and slow efforts to reduce carbon emissions. The tariff on ship-to-shore cranes will make imports in general more expensive in the future and will just lead to more imports of these cranes from other countries since the United States does not produce any.

This is true in general for tariffs on imports from China. Since the U.S. began the trade war under the Trump administration in 2017, U.S. imports of goods from China are down more than 15%, but total imports from all countries are up 30%.

For decades the United States promoted free trade and in particular the free movement of capital. But as the U.S. economy declined relative to other countries, going from 40% of world Gross Domestic Product in the 1950s to only 20% today, the United States has become more protectionist. The big break came under the Trump Administration, but the Biden Administration has continued and escalated the trade war with China.

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