USTR Delays Final Decision on China Tariffs; Announcement Expected Soon, Reports Reuters

By David Lawder

WASHINGTON – The Biden administration has once again postponed announcing its final decisions regarding significant tariff increases on Chinese-made electric vehicles, batteries, semiconductors, and solar cells. A spokesperson for the U.S. Trade Representative’s Office indicated that the agency is still finalizing its determination on proposed modifications to the tariffs initially implemented under President Donald Trump in 2018 and 2019.

This delay follows the return of White House National Security Adviser Jake Sullivan from discussions with senior Chinese officials in Beijing, which included a meeting with President Xi Jinping, where both parties underscored the importance of managing U.S.-China relations.

The spokesperson from the USTR emphasized that the agency is continuing its work on the final determination linked to the Section 301 investigation into China’s practices related to technology transfer, intellectual property, and innovation. They expect to publicly announce their final decisions in the near future.

The proposed higher duties would have imposed a 100% tariff on electric vehicles, a 50% tariff on semiconductors and solar cells, and a 25% tariff on lithium-ion batteries, key minerals, steel and aluminum, ship-to-shore cranes, and syringes. These tariffs were initially set to take effect on August 1, but the USTR postponed implementation until September to allow more time to review over 1,100 public comments from industry stakeholders, and set an initial deadline for the end of August, which has now been further extended.

The decision on whether to ease these tariffs marks the Biden administration’s first major trade action since Vice President Kamala Harris became the Democratic Party’s presidential nominee, taking over the position from President Biden in late July.

Reducing the tariffs is expected to attract criticism from Republicans who may argue that Harris is adopting a more lenient approach to China trade, especially as former President Trump has pledged to impose tariffs up to 60% on Chinese imports. Meanwhile, various industries and some lawmakers have expressed their worries about rising costs associated with the tariffs.

Electric vehicle battery manufacturers, including Ford Motor Co., have urged the USTR to reconsider the proposed 25% duty on graphite used in battery anodes due to ongoing reliance on Chinese supplies. Additionally, port operators have indicated that costs for Chinese cranes under contract would increase, as there are currently no U.S. manufacturers of these large port cranes.