USTR Finalizes New Tariffs on Chinese Goods

On Sep. 13, 2024, the US Trade Representative (USTR) announced significant changes to tariffs on Chinese goods, concluding a four-year review under Section 301 of the Trade Act. This review scrutinized China’s practices related to technology transfer, intellectual property, and innovation. The new measures counter what the United States sees as unfair trade practices by China and aim to bolster American businesses and workers.

​​“Today’s finalized tariff increases will target the harmful policies and practices of the People’s Republic of China that continue to impact American workers and businesses. These actions underscore the Biden-Harris Administration’s commitment to standing up for American workers and businesses in the face of unfair trade practices,” says Katherine Tai, US Trade Representative. 

The USTR’s actions come as a response to persistent concerns about China’s trade practices, particularly regarding technology transfer and intellectual property theft. The review process, initiated in May 2022, involved extensive feedback from domestic industries and public comments. Over 1,500 comments were received and considered. 

Key Changes in Tariff Policies

The changes introduce modifications to existing tariffs and add new ones on various Chinese products across strategic sectors. The changes include:

1. Increased Tariffs on Specific Products:

• Tungsten Products: Proposed increases in tariffs on tungsten products, including specific subheadings.

• Wafers and Polysilicon: Increased tariff rates are planned for certain semiconductor materials crucial for tech manufacturing.

2. Temporary Exclusions:

• Solar Manufacturing Equipment: Certain solar manufacturing equipment will be temporarily excluded from the tariffs to support domestic solar energy production and manufacturing.

3. Sector-Specific Increases:

• Battery Parts (Non-Lithium-ion Batteries): A 25% tariff increase on non-lithium-ion battery parts, specifically targeting lead-acid storage batteries.

• EVs: A 100% tariff on EVs, focusing on high-tech passenger vehicles to reduce dependency on Chinese sources.

• Facemasks: Tariffs on facemasks will increase, with N95 respirators seeing a rise to at least 25% in 2024, potentially reaching 50% by 2026.

• Lithium-Ion Batteries: Tariffs on lithium-ion batteries will increase to 25% for electric vehicles and other uses.

• Lithium-ion Batteries Not for Electric Vehicles: A 25% tariff increase, by 2026.

• Medical Gloves: Tariffs on medical gloves will increase to 50% by 2025 and 100% by 2026.

• Natural Graphite and Other Critical Minerals: Tariffs on natural graphite and other critical minerals will rise to 25% by 2026.

• Solar Cells (whether or not assembled into modules): A 50% increase on Sep. 27, 2024.

• Steel and Aluminum: A rise of 25% starting on Sep. 27, 2024.

• Syringes and Needles: A 50% tariff will be applied to syringes and needles starting in 2025, followed up by a further Increase by 2026, of 100% on specific subheadings.

4. Sector-Specific Adjustments:

• Permanent Magnets: A 25% tariff will be imposed starting in 2026 on permanent magnets used in various applications, including defense.

• Semiconductors: A 50% tariff increase on semiconductors starting in 2025 to support domestic manufacturing and reduce reliance on China.

• Ship-to-Shore Cranes: Tariffs will increase by 25%, with exemptions for cranes purchased under pre-existing contracts.

“These hard and selective tariffs are crucial to combat China's state subsidies and technology transfer policies, which have led to an oversupply and overcapacity in these industries,” says Lael Brainard, Chief Economic Advisor,  White House, to Reuters.

China’s Ministry of Commerce had previously announced that it would respond to any tariffs with countermeasures, as previously reported by MBN.