US increases tariffs on imports of Chinese solar wafers, polysilicon and tungsten products

BANGKOK– The Biden administration plans to increase tariffs on solar wafers, polysilicon and some tungsten products from China to protect U.S. clean energy companies.

The notice from the Office of the U.S. Trade Representative states that tariffs on solar wafers and polysilicon made in China will increase to 50% and duties on certain tungsten products will increase to 25%, effective January 1, following a review of Chinese business practices.

“The tariff increases announced today will further mitigate the People’s Republic of China’s harmful policies and practices,” USTR Katharine Tai said in a statement. “These actions will complement domestic investments made under the Biden-Harris administration to promote a clean energy economy, while increasing the resilience of critical supply chains.

Reports on Thursday indicated that U.S. and Chinese officials would meet this week and next week for trade negotiations before the end of the year.

Last week, Washington tightened restrictions on China’s access to advanced semiconductor technology. Beijing responded by banning exports to the United States of certain minerals essential for making computer chips, such as gallium, germanium and antimony. It also tightened its controls on graphite exports to the United States.

China supplies a very large share of most of these materials, and the United States is working to find alternative sources in Africa and other parts of the world.

Tungsten is another strategically vital metal whose production is dominated by China. The United States does not produce them. It is used to make weaponry and is also used in x-ray tubes and light bulb filaments, among other industrial applications.

After Beijing announced its ban on exports of gallium and other materials to the United States, analysts said tungsten was another likely area where China could retaliate.

Trade frictions have intensified in the run-up to the inauguration of President-elect Donald Trump, who has pledged, among other threats, to impose 60% tariffs on Chinese goods. President Joe Biden said Trump’s promise to impose sweeping tariffs on foreign imports would be a mistake.

His administration has maintained the tariffs imposed by Trump during his first term, in some cases increasing them even more, but says it has taken a more targeted approach.

China has sharply increased its production of cheap electric vehicles, solar panels and batteries at a time when the Biden administration has championed measures to support those industries in the United States.

The United States and other trading partners say China unduly subsidizes exports, giving exporters of solar panels and other products an unfair advantage in foreign markets, where its manufacturers charge lower prices thanks to government support. government. Washington also says China is inappropriately pressuring foreign companies to hand over their technology.

China represents more than 80% of the market for solar panels at all stages of production, according to the International Energy Agency, this is more than double the domestic demand for these products. Its huge economies of scale have made solar more affordable, but also concentrated the supply chain in China. The IEA urged other countries to assess their solar panel supply chains and develop strategies to address any risks.

In early 2018, the Trump administration imposed 30% tariffs on imports of Chinese solar panels. Beijing filed a complaint the World Trade Organization accusing the United States of unfairly supporting electric vehicle purchases.

The investigation that led the USTR to raise tariffs on solar panels concluded with a report released in May that led to increased tariffs on a range of products, including electric vehicles, syringes and needles, medical gloves and masks, semiconductors and steel and aluminum products. among others.