The Biden administration has solidified steep tariff increases on Chinese imports, with the goal of bolstering protections for strategic U.S. industries. This move, which includes a 100% duty on electric vehicles (EVs), aims to counteract China's state-driven industrial policies and its growing dominance in sectors like electric vehicles, solar energy, and semiconductors.

Announced on Friday, the new tariffs are set to take effect on September 27 for Chinese EVs and related sectors. According to the U.S. Trade Representative (USTR), additional duties will also target solar cells (50%), steel, aluminum, EV batteries, and key minerals (25%).

Tariffs on Chinese semiconductors, which now cover new categories like silicon wafers and polysilicon used in solar panels, will increase to 50% starting in 2025.

The tariff increases follow a more than two-year review of measures initially imposed by former President Donald Trump. They are intended to protect U.S. industries from China's state-subsidized overproduction, which has disrupted global markets. The decision, however, has raised concerns among several U.S. industries, particularly those dependent on Chinese supplies, such as the automotive and semiconductor sectors.

Information Technology Industry Council President Jason Oxman criticized the tariffs, saying they have already cost U.S. businesses and consumers $221 billion while failing to alter China’s trade practices. “With today’s announcement, USTR once again relies on the blunt and ineffective tool of tariffs,” he said in a statement.

Despite these concerns, the White House argues that the tariffs are necessary to ensure the U.S. EV and tech sectors diversify away from China's supply chain dominance.

Lael Brainard, the top White House economic adviser, described the tariffs as “tough, targeted” measures to counter China’s unfair cost advantages in global markets. She emphasized that China’s state subsidies have enabled its industries, particularly electric vehicles, to dominate other markets. “That’s not going to take place here under the vice president’s and the president’s leadership,” Brainard said.

While China’s share of the European and North American EV markets has grown, Brainard said the U.S. is investing hundreds of billions of dollars in tax subsidies to develop domestic EV production, solar energy, and semiconductor sectors to ensure competitiveness.

Automakers and several other industries have voiced concerns about the potential impact on their supply chains. The semiconductor industry, in particular, warned that the additional tariffs on silicon wafers and related components could disrupt the already strained production of semiconductor-intensive products.

Additionally, the U.S. automotive industry remains heavily dependent on Chinese minerals and graphite, which are critical for EV battery production. Despite pleas from automakers to reduce these tariffs, the Biden administration left the increased duties in place, raising concerns about the costs of EV production.

The medical supplies industry will also face steeper tariffs. For instance, tariffs on medical face masks and surgical gloves will rise from an initial 25% to 50%, and duties on Chinese syringes will jump to 100%—though there will be a temporary exclusion for enteral syringes used to feed infants for the next year.

In response to the announcement, a spokesperson for China’s embassy in Washington warned that the tariffs would "backfire" on the U.S. and accused Washington of "unilateralism and protectionism." The spokesperson said China would take all necessary measures to safeguard its interests.

The tariff hikes come as part of a larger global effort to reduce reliance on Chinese imports. The European Union and Canada have also imposed similar tariffs on Chinese EVs, with Canada matching the 100% U.S. duties.

As the 2024 U.S. presidential election looms, both Trump and Vice President Kamala Harris are emphasizing their hardline stances on China. Trump has promised to impose 60% tariffs on all Chinese imports if re-elected, making the China-U.S. trade relationship a central issue in the campaign.

While the tariffs are being implemented across several sectors, the USTR provided some temporary relief. Port operators facing new 25% tariffs on ship-to-shore cranes dominated by Chinese producers have been granted an exemption for any cranes ordered before May 14, 2023, as long as they are delivered by May 2026.

Additionally, the USTR said it would consider tariff exclusion requests for five categories of Chinese industrial machinery, including those used for purifying liquids, industrial robots, and printing machinery.

As the U.S. locks in steep tariff hikes on Chinese imports, industries brace for potential disruptions in supply chains and production costs. While the tariffs aim to protect U.S. industries from China's state-driven policies, critics argue that they could hinder U.S. businesses and consumers, raising costs without effectively addressing the broader trade challenges. The upcoming 2024 presidential election could also shift the trajectory of U.S.-China trade relations, as both Trump and Harris vie for a hardline stance against China.