US Cutting Off Its Nose to Spite China’s Face

05/25/2024 by abc

Seeing the growing development of China, some countries of the Western world are becoming more jealous day by day. To build a healthy world where everyone should work together to promote green technology, the US has imposed additional tariffs on several environmentally friendly products from China. US residents will have to pay extra due to excessive tariffs on electric vehicles, lithium-ion batteries, solar panels, rare minerals, semiconductors, etc. Even if the world stumbles a little on the way to becoming environmentally friendly, experts say that the additional tariffs imposed by the United States will not affect China’s trade. By Faisal Abdullah

Additional tariffs imposed by the US on some Chinese products will not have a serious impact on Chinese industries, according to Chinese experts. They believe this action by the United States was taken for political purposes and has nothing to do with economics.

This year, the US government announced that it would increase the tariff on imported Chinese electric cars from 25% to 100%. The duty on solar cells will be increased from 25% to 50%. The country will raise tariffs on special steel and aluminum made in China to an unusual rate of 7.5% to 25%.

Market watchers say China has many options to counter such a move by the US. Currently, China’s electric vehicle market share is relatively low in the United States. Therefore, the tariff increase will not have an immediate effect, said Tang Chao, head of an institute under the Beijing-based Chinese Academy of International Trade and Economic Cooperation.

On the other hand, Sun Lei, a senior official at the Beijing Tsheng Law Office, said that the main reason for the decision to increase tariffs in the United States is that without intervention, China’s electric car market in the US would have definitely increased. Such a move would raise US costs due to its dependence on China’s supply chain. Sun Lei also mentioned that this will pressure Chinese companies to build factories and invest in other regions of the world, thereby increasing their decision-making and market management capabilities.

Robots operate an automated assembly line of Nio vehicles in Hefei in October. XINHUA

The expert added that since the automotive supply chain is vast, relocating vehicle assembly lines will impact the entire supply chain, particularly increasing the cost of steel, aluminum, engines, and batteries used in US vehicles. “Many electric vehicle brands such as Tesla, Toyota, BMW, and Mercedes-Benz rely on China’s supply chain,” said Professor Ting Richia, an expert in energy economics at China University of Mining and Technology in Beijing. As a result of the tariffs imposed by the United States, the costs for these car manufacturers will also increase, and consumers will pay the price.

China’s steel, aluminium, and automobiles still account for a small portion of the US supply chain, Ting Richia said. In agreement with Ting, Lin Boqiang, head of the China Institute for Studies in Energy Policy at Xiamen University in Fujian Province, said the main goal of the US additional tariffs on Chinese solar products is to hinder China’s industrial development. However, China’s photovoltaic cells are technologically advanced, and even at a low price, the after-sales service is excellent.

Lin pointed out that the US move will not have much impact on China’s solar panel technology, as China does not export a significant amount of this product to the US. According to the China Photovoltaic Industry Association, the US is not among the top ten countries in China’s solar module export market. Chinese experts also said that the US is installing an average of about 40 gigawatts of solar power annually, which is less than 10 percent of the global market.

On the other hand, China’s solar products are still strong in terms of prices, and demand for these technologies remains high in other markets around the world.

Therefore, it is clear that the US is cutting off its nose to spite its face by raising tariffs on China’s eco-friendly products, which will not derail China’s economy.