US to impose new tariffs on China
New United States tariffs against China begin today, targeting challenges to the American clean energy sector.
These tariffs are a continuation of the Section 301 investigation, which has led to tariffs against Chinese electric vehicles, lithium-ion electric vehicle batteries, and battery parts, among other goods. This wave of tariffs is targeted at select tungsten products, polysilicon, and wafers, with duties on tungsten products increasing 25%, while duties on polysilicon and wafers will increase 50%.
Although this current wave of tariffs has been implemented by the Biden administration, the policy of Chinese tariffs is likely to continue during Donald Trump’s second administration. President-elect Trump plans to institute a 10% tariff across all Chinese exports, in addition to tariffs against Mexico and Canada, as he pursues a mercantilist economic approach. A potential Chinese response could be an adjustment for the renminbi (RMB). While this would likely come in the form of weakening the RMB, an adjustment would allow the nation to continue exporting competitively without directly escalating tensions with the United States. In the short term, this aggressive approach may see some gains for the Trump administration, and some concessions from China. However, China’s long-term goal of promoting themselves as a global leader of trade, may encourage them to make these concessions in hopes of achieving future long-term influence. This shift towards China could be in the cards if the Trump administration is serious about their nationalist approach, allowing China to take a larger role in the global economy as a result.
