Jan 5, 2024 - Politics & Policy

Scoop: Biden preparing to keep many of Trump's China tariffs

Illustration of Joseph Biden on a background of stars looking on

Photo illustration: Eniola Odetunde/Axios. Photo: Frederic J. Brown/Getty Images  

The Biden administration is moving toward keeping many of former President Trump's controversial tariffs on some $300 billion in Chinese imports in place, and aims to increase duties on electric vehicles and some critical minerals, three sources familiar with the matter tell Axios.

Why it matters: In his bid for re-election, President Biden wants to put his stamp on Trump's tariffs and make the case that his approach is smarter and more strategic.

  • He also wants to show a tough stance toward China to undermine any attempts by Trump to cast Biden as "soft" on the Asian powerhouse, as Trump did in 2020.

Zoom in: Biden administration officials are still considering whether to pair higher duties on EVs and critical minerals, such as cobalt and lithium, with lower tariffs on some consumer goods.

  • Either way, the total amount of the Chinese imports subject to the so-called 301 tariffs, named after a section in the Trade Act of 1974, would stay roughly in the $300 billion range.
  • Biden hasn't made a final decision, but an announcement is expected in the coming weeks, the sources said.
  • "The administration continues to conduct its statutory review of Section 301 tariffs on Chinese products," said a National Security Council spokesperson, referring to a process that began in May of 2022. "No decision has been made and any reporting at this stage is conjecture."
  • A spokesperson for the United States Trade Representative declined to comment.

Zoom out: Three years into his presidency, Biden is still fine-tuning his approach to China, insisting that he doesn't want to "de-couple" the two economies while preserving his ability to prevent China from gaining a military advantage in critical areas.

  • In Congress, he's pursued an aggressive industrial policy, with a $280 billion chips bill and green energy tax credits in the Inflation Adjustment Act. The goal is to bring many supply chains closer to home.
  • At the same time, Biden has imposed export controls on U.S.-made advanced semiconductors and chip-making equipment destined for China — and urged allies to do the same.
  • With an executive order he also set new restrictions on outbound investment for China's semiconductor, artificial intelligence and quantum computing industries.

After meeting with President Xi Jinping on the sidelines of the APEC summit in November, Biden said the talks were "the most constructive and productive discussions we've had," claiming progress on combating fentanyl and climate change.

Between the lines: Throughout 2022, with inflation raging, the Biden administration debated lowering tariffs on Chinese goods to help cut inflation on consumer goods such as bicycles and men's underwear.

  • Labor unions publicly pressured Biden to keep Trump's tariffs in place, putting him on notice that they were watching him closely on the issue.
  • Ultimately Biden decided against making specific reductions and instead left the fate of Trump's Section 301 tariffs to a required four-year review.
  • That process was expected to conclude by the end of 2023, but isn't done. Business groups have called for Biden to move faster.

What we're watching: Even though inflation is easing, Biden is still considering lower duties on some consumer goods.

The bottom line: Most of Trump's tariffs on China are likely to survive Biden's presidency.

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