Washington, D.C. (June 4, 2024) - On May 14, 2024, the U.S. substantially increased tariff rates – in some cases by as much as fourfold – on imports of an array of strategic products from China. The tariff surge builds on high tariffs already in place under an international trade law remedy imposed in 2018. The decision to raise the tariff rates resulted from continuing trade friction with China over intellectual property violations, trade imbalances, and national security and human rights concerns. Businesses with an interest in the designated imports should pay close attention to these changes and their implications for U.S. commerce.
Examples of the jump in tariff rates for various products are as follows (numbers shown are from 2018 – current):
- electric vehicles (25% to 100%),
- semiconductors (25% - 50%),
- solar cells (25% - 50%),
- syringes and needles (0% - 50%),
- some steel and aluminum products (7.5% - 25%),
- lithium-ion batteries (7.5% - 25%),
- battery parts (7.5% - 25%),
- some personal protective equipment (7.5% - 25%),
- rubber, medical, and surgical gloves (7.5% - 25%),
- natural graphite and permanent magnets (0% - 25%),
- other critical minerals (0% - 25%), and
- ship to store cranes (0% - 25%)
The increased tariffs have significant implications for both the U.S. and global economies. First, they may have domestic impacts. While tariffs can protect U.S. industries from unfair competition, they also raise costs for American consumers and businesses that rely on imported goods. For example, this is occurring in the solar industry, where domestic manufacturers heavily rely on solar cells from Chinese enterprises to build modules. Second, the tariffs may have a global impact on trade. Tariffs contribute to ongoing trade tensions and can lead to retaliatory measures from China, potentially disrupting global supply chains. Finally, they may impact human rights. The U.S. has also highlighted human rights abuses in China, including the treatment of Uighurs in Xinjiang, as a factor in its trade policy.
The latest U.S. government tariff hike on imports from China relies on retaliatory tariffs imposed in 2018 under section 301 of the Trade Act of 1974, an underlying action that China continues to dispute. Objecting to the section 301 remedy, China has initiated dispute settlement mechanisms under The General Agreement on Tariffs and Trade ("GATT"), encouraged Chinese corporations to file thousands of cases seeking refunds for duties – which has enjoyed partial success in the U.S. Court of International Trade ("CIT")(see In re Section 301 Cases, 570 F. Supp. 3d 1306, 1343 (U.S. Ct. Intl' Trade 2022)) - and by imposing its own retaliatory tariffs on $130 billion of Chinese imports of U.S. goods.
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