Serious battles are again unfolding on the geopolitical stage. Once again, the United States and China have been engaged in a fierce trade war. Late last week, the Biden administration approved hefty tariff hikes on Chinese imports, including a 100% duty on electric vehicles. The White House justifies this decision by protecting strategically important sectors of the US economy from excess capacity created by China.

The US Trade Representative announced that some tariffs will take effect on the last Friday of the month, September 27, 2024, such as the 100% duty on Chinese electric vehicles, 50% on solar panels, and 25% on steel, aluminum, electric vehicle batteries, and key minerals.

These tariff hikes preface the introduction of the 50% tariff on Chinese semiconductors, which now include two new categories — polysilicon used in solar panels and silicon wafers. This will come into force in 2025.

At the same time, US authorities decided to refrain from the increase in tariffs from 0% to 25% on lithium-ion batteries, minerals, and components. The increase in tariffs on EV batteries will take effect on September 27, while tariffs on other devices, including laptops and cell phones, will enter into force on January 1, 2026.

According to Lael Brainard, the White House's chief economic advisor, this decision was made to ensure the diversification of the US electric vehicle industry, reducing dependence on the dominant Chinese supply chain.

Chinese authorities have not remained passive and have pledged to take retaliatory measures against the outrageous tariff increases.

Previously, the European Union and Canada announced the introduction of new tariffs on Chinese electric vehicle imports.