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Market News

RPT-Biden's tariff warnings signal sharp anti-China election battle
19-Apr-24 10:02

(Repeats with no changes to text)

    By Jarrett Renshaw

       April 19 (Reuters) - The Biden administration's threat

to impose more tariffs on China is the latest election-year

signal that frostier relations with China are likely to follow

regardless of who wins the U.S. presidency.

    U.S. President Joe Biden traveled to the battleground state

of Pennsylvania on Wednesday to call for higher tariffs on

Chinese steel and aluminum products, and top administration

officials have signaled those are unlikely to be his last salvo

against China this election season.

    The same day, Treasury Secretary Janet Yellen signaled that

tariffs on Chinese electric vehicles may be necessary to protect

American workers from Beijing's glut of overproduction.

    This week, the administration also launched an investigation

into what it said were China's attempts to dominate the

maritime, logistics and shipbuilding industries. Many experts

now think the result of that probe and an ongoing multi-year

review of Trump-era trade policies will be even more new tariffs

on imports from China.

    Liu Pengyu, spokesperson at the Chinese embassy in

Washington, said U.S. tariffs embody unilateralism and

protectionism.

    "Many trading partners of the United States, including

China, are strongly dissatisfied with the United States'

frequent use of national security, non-market behavior,

overcapacity and other reasons to impose restrictions and

politicize trade issues," Pengyu said in a statement on

Wednesday in response to the proposed steel tariffs.

    The Biden administration's decision to ramp up tariffs this

week suggests a hawkish trade climate heading into the 2024

election as Biden and his Republican rival, Donald Trump, see a

tough-on-China stance as a part of the road to victory,

particularly in rust-belt states like Michigan and Pennsylvania.

    Trump has proposed 10% across-the-board import tariffs if he

were to return to the White House.

    He also proposes phasing out Chinese imports of goods such

as electronics, steel and pharmaceuticals over four years and

wants to prohibit Chinese companies from owning U.S.

infrastructure in the energy and tech sectors.

     Forty-one percent of Americans named China as the greatest

U.S. enemy in a Gallup poll released in March, making it the top

perceived U.S. adversary for the fourth straight year, the

polling group said.

    "China is inevitably getting drawn into what's likely to be

a little bit of a chaotic cycle. And I think really, right now,

we're just seeing the beginnings of that," said Allen Carlson, a

Cornell University professor and expert on U.S.-China relations.

    White House officials dismiss the idea that politics is at

play, even as Biden trumpeted the proposed steel tariffs in an

emotional anti-Trump speech at the United Steelworkers union

headquarters in Pennsylvania.

    Instead, administration officials say they fear a flood of

low-cost exports from China is jeopardizing billions of dollars

in tax incentives secured by Biden to anchor industries like

solar, wind and electric vehicles in the United States.

    China's slow-growing economy is forcing manufacturers to

double down on exports to offset weak domestic demand growth,

causing China's manufacturing trade surplus to surge to record

levels, administration officials say.

    Double sided-solar panels, known as bifacials, provide an

example of the administration's concerns. The administration

granted an tariff exemption to China until 2026 to help promote

solar power in the U.S., but now officials are expected to lift

the ban and impose tariffs after cheap cells flooded the U.S.

market, Reuters reported on Wednesday.

    South Korea's Hanwha Qcells asked the administration to lift

the ban to protect a pledged $2.5 billion expansion of its U.S.

solar manufacturing presence against competition from cheaper

Asian-made products.

    Biden aides said their administration's policies differed

from Trump's in key respects, including being narrowly targeted

to specific industries and products - which could lower the odds

of strong retaliation by China and other foreign governments.

    The steel and aluminum proposal, for instance, would only

target $1 billion in goods versus the hundreds of billions

implicated by Trump's broader tariffs, a senior administration

official said.

    Strong U.S. policy against China is one of the rare issues

that has strong bipartisan support across the country.

    "Everybody's anti-China these days and it's reflected in

public opinion," said Bill Reinsch, a senior adviser at the

Center for Strategic and International Studies.

(Reporting By Jarrett Renshaw; additional reporting by Jeff

Mason; editing by Trevor Hunnicutt and Deepa Babington)

((jarrett.renshaw@thomsonreuters.com; (646) 223-6193;))

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