Day: May 14, 2024

Biden will keep tariffs put in place by his Republican predecessor Donald Trump while ratcheting up others, including a quadrupling of EV duties to over 100%, the White House said in a statement. It cited “unacceptable risks” to U.S. economic security posed by what it considers unfair Chinese practices that are flooding global markets with cheap goods.

The new measures impact $18 billion in Chinese imported goods including steel and aluminum, semiconductors, batteries, critical minerals, solar cells and cranes, the White House said. The announcement confirmed earlier Reuters reporting.

The United States imported $427 billion in goods from China in 2023 and exported $148 billion to the world’s No. 2 economy, according to the U.S. Census Bureau, a trade gap that has persisted for decades and become an ever more sensitive subject in Washington.

“China’s using the same playbook it has before to power its own growth at the expense of others by continuing to invest, despite excess Chinese capacity and flooding global markets with exports that are underpriced due to unfair practices,” White House National Economic Adviser Lael Brainard told reporters on a conference call.

U.S. Trade Representative Katherine Tai said the revised tariffs were justified because China was continuing to steal U.S. intellectual property and in some cases had become “more aggressive” in cyber intrusions targeting American technology.

She said prior “Section 301” tariffs had minimal impact on U.S. economy-wide prices and employment, but had been effective in reducing U.S. imports of Chinese goods, while increasing imports from other countries.

But Tai recommended tariff exclusions for dozens of industrial machinery import categories from China, including 19 for solar product manufacturing equipment.

Even as Biden’s steps fell in line with Trump’s premise that tougher trade measures are warranted, the Democrat took aim at his opponent in November’s election.

The White House said Trump’s 2020 trade deal with China did not increase American exports or boost American manufacturing jobs, and it said the 10% across-the-board tariffs on goods from all points of origin that Trump has proposed would frustrate U.S. allies and raise prices. Trump has floated tariffs of 60% or higher on all Chinese goods.

Administration officials said their measures are “carefully targeted,” combined with domestic investment, plotted with close allies and unlikely to worsen a bout of inflation that has already angered U.S. voters and imperiled Biden’s re-election bid. They also downplayed the risk of retaliation from Beijing.

Biden has struggled to convince voters of the efficacy of his economic policies despite a backdrop of low unemployment and above-trend economic growth. A Reuters/Ipsos poll last month showed Trump had a 7 percentage-point edge over Biden on the economy.

Analysts have warned that a trade tiff could raise costs for EVs overall, hurting Biden’s climate goals and his aim to create manufacturing jobs.

Biden has said he wants to win this era of competition with China but not to launch a trade war that could hurt the mutually dependent economies. He has worked in recent months to ease tensions in one-on-one talks with Chinese President Xi Jinping.

Both 2024 U.S. presidential candidates have sharply departed from the free-trade consensus that once reigned in Washington, a period capped by China’s joining the World Trade Organization in 2001.

China has said the tariffs are counterproductive and risk inflaming tensions. Trump’s broader imposition of tariffs during his 2017-2021 presidency kicked off a tariff war with China.

As part of the long-awaited tariff update, Biden will increase tariffs this year under Section 301 of the Trade Act of 1974 from 25% to 100% on EVs, bringing total duties to 102.5%, from 7.5% to 25% on lithium-ion EV batteries and other battery parts and from 25% to 50% on photovoltaic cells used to make solar panels. “Certain” critical minerals will have their tariffs raised from nothing to 25%.

The tariffs on ship-to-shore cranes will rise to 25% from zero, those on syringes and needles will rise to 50% from nothing now and some personal protective equipment (PPE) used in medical facilities will rise to 25% from as little as 0% now. Shortages in PPE made largely in China hampered the United States’ COVID-19 response.

More tariffs will follow in 2025 and 2026 on semiconductors, whose tariff rate will double to 50%, as well as lithium-ion batteries that are not used in elective vehicles, graphite and permanent magnets as well as rubber medical and surgical gloves.

A step Biden previously announced to raise tariffs on some steel and aluminum products will take effect this year, the White House said.  

A number of lawmakers have called for massive hikes on Chinese vehicle tariffs. There are relatively few Chinese-made light-duty vehicles being imported now. Senate Banking Committee Chairman Sherrod Brown wants the Biden administration to ban Chinese EVs outright, over concerns they pose risks to Americans’ personal data.

U.S. Treasury Secretary Janet Yellen, who warned China in April that its excess production of EVs and solar products was unacceptable, said that such concerns were widely shared by U.S. allies and the actions were “motivated not by anti-China policy but by a desire to prevent damaging economic dislocation from unfair economic practices.” 

Georgia’s ruling party adopted the controversial foreign agents’ law in its third and final reading by 84 votes against 30 on May 14, amid widespread local protests and despite fierce opposition from the West.

The ruling Georgian Dream majority voted in favor of the law during a tense plenary session that included brawls among lawmakers, while a large group of protesters had again gathered outside the parliament building. The President is now expected to veto the bill, giving protesters and Georgia’s Western partners weeks of time to put more pressure on the party to withdraw the legislation.

The law “On Transparency of Foreign Influence”, reintroduced by the Georgian Dream party despite its defeat last year amid mass protests, will force foreign-funded NGOs and media organizations to register as “organizations pursuing the interests of a foreign power”. There are widespread fears that it will be used to stigmatize critical voices, while its vague provisions and proposed fines are feared to be arbitrarily applied, ultimately leading to the obstruction of the work of civil society organizations, as has happened with similar laws in Russia.

The ruling party proceeded with the adoption despite the ever-growing and weeks-long protest movement, which spread throughout the country and attracted various social groups, including a massive student movement. The authorities tried to suppress the protests with police violence, thuggery, and intimidation, all of which proved counterproductive as it brought even more people into the streets.

In overwhelmingly pro-Western Georgia, which became an EU candidate country in December, many are convinced that the law’s adoption will put an end to the country’s European aspirations and bring Georgia back under Russian influence. Georgia’s international partners, including top EU officials, politicians, and diplomats have warned that the law will stand in the way of the country’s European integration path. Brussels, however, has yet to specify the concrete consequences.

The young people carrying EU flags along with national flags and playing Ode to Joy in front of the parliament building have become the defining image of the ongoing protests.

Despite passing the final reading, President Salome Zurabishvili has promised to veto the bill, and while the Georgian Dream majority can easily override it, the measure is expected to prolong the process of signing the bill for several weeks.

In the past days, the leaders of Georgian Dream said GD is open to holding talks with Western partners after the presidential veto and making changes to the bill if they receive convincing “legal arguments”. Opponents of the law, however, reject such prospects and see them as a trap. President Zurabishvili called such promises “manipulation” and vowed not to “play these games.”

“Don’t count on me that I will enter into this game of embellishing this law. It is Russian and will stay Russian, just as you yourselves,” the President said in her May 12 briefing.

Theories vary as to why Georgian Dream is so adamant about risking reputational damage to pass the law. Some have attributed the determination to a desperate attempt to stifle criticism and undermine election monitoring ahead of October’s parliamentary elections. Others cited pressure from the Kremlin.

But later statements by Prime Minister Irakli Kobakhidze, as well as the context in which the bill was first introduced last year, suggest that the banking problems of GD’s billionaire founder, Bidzina Ivanishvili, may be part of the reason.

Ivanishvili, who made his comeback to formal politics months ago, has regularly cited his difficulties in accessing billions of dollars from the Swiss bank Credit Suisse. His allies have linked the problems to Western blackmail to draw Georgia into Russia’s war against Ukraine, in what is known as the “Global War Party” conspiracy theory.

Ivanishvili “had frozen 2 billion [U.S.] dollars that he had entrusted to the West, but which turned up in the hands of the Global War Party,” Kobakhidze said on May 13.

Also Read:

• Live Blog: ‘Yes to Europe, No to Russian Law’ – Rallies Against Foreign Agents Bill
• PM: Ivanishvili “Refused to Meet” with Assistant Secretary O’Brien, Cites Blackmail and Threats
• RFE/RL: EU Top Diplomats Ask for Commission’s Oral Update on Foreign Agents Law Effects

Rectors of 38 universities address the academic boycott by students and professors over the foreign agents law, saying that “a political process must remain outside the academic space” and that “it is unacceptable that several academic personnel refuse to perform their duties”, i.e. to give lectures despite the current situation amid the infamous law.

The rectors emphasize that “the education of young people in a free and non-discriminatory environment is a fundamental basis for our European future” and that political processes “must not interfere with the functioning of the universities and the conduct of the academic process.”

The rectors blame the professors who refused to hold lectures because of the massive protests against the foreign agents law, saying that their decision “violates the constitutional rights of the students.” They also say that these professors are “harming the interests of the students who attend the lectures.”

“Each university and its professors and teachers are obliged to ensure the uninterrupted conduct of the educational process and the creation of a politically free, healthy and academic educational environment,” the rectors said.

“If our intention is a better Georgia, the only and best way to achieve it is through quality education,” the rectors say, adding that they also find unacceptable that some groups make “political statements” in the name of universities.

The rectors’ statement, which was not signed by some leading universities, including Ilia Chavchavadze Tbilisi State University and the Free University of Tbilisi, was met with criticism as many students, as well as many of their professors, take the view that the struggle for the country’s European future on the streets takes precedence over attending lectures in a business-as-usual manner.