Daily Press

US factories hit a roadblock

Biden mulls tariffs as Chinese imports put new investment­s in clean energy, tech at risk

WASHINGTON — The Biden administra­tion has begun pumping more than $2 trillion into U.S. factories and infrastruc­ture, investing huge sums to try to strengthen American industry and fight climate change.

But the effort is facing a familiar threat: a surge of low-priced products from China. That is drawing the attention of President Joe Biden and his aides, who are considerin­g new protection­ist measures to make sure American industry can compete against Beijing.

As U.S. factories spin up to produce electric vehicles, semiconduc­tors and solar panels, China is flooding the market with similar goods, often at lower prices than American competitor­s. A similar influx is also hitting the European market.

U.S. executives and officials argue that China’s actions violate global trade rules. The concerns are spurring new calls in the

United States and Europe for higher tariffs on Chinese imports, potentiall­y escalating what is already a contentiou­s economic relationsh­ip between China and the West.

The Chinese imports mirror a surge that undercut the Obama administra­tion’s efforts to seed domestic solar manufactur­ing after the 2008 financial crisis and drove some American startups out of business. The administra­tion retaliated with tariffs on solar equipment from China, sparking a dispute at the World Trade Organizati­on.

Some Biden officials are concerned that Chinese products could again threaten the survival of U.S. factories when the government is spending huge sums to jump-start domestic manufactur­ing. Administra­tion officials appear likely to raise tariffs on EVs and other strategic goods from China, as part of a review of the levies President Donald Trump imposed on China four years ago, according to people familiar with the matter. That review, which has been underway since Biden took office, could conclude in the next few months.

Congress is also agitating for more protection­s. In a Jan. 5 letter to the Biden administra­tion, bipartisan members of a House committee expressed concerns about China flooding the U.S. with semiconduc­tors. That followed a November letter in which members of the committee advised the Biden administra­tion to consider a new trade case over China’s EV subsidies, which could result in additional tariffs on cars.

The U.S. has maintained tariffs on hundreds of billions of dollars of Chinese products over the past five years, viewing that as a way to offset Beijing’s ability to undercut American manufactur­ers by selling cheaper products in the United States. Biden has tried to further help American companies with billions in subsidies intended to boost U.S. manufactur­ing of clean energy technology such as solar panels and EVs along with semiconduc­tors.

Yet Chinese industrial policy spending outstrips that of the United States. Facing an economic slowdown and a gradual bursting of the property bubble, China has redoubled efforts to promote exports and support its factory sector.

Beijing is focused on investment in hightech products with strategic importance, such as EVs and semiconduc­tors, said Ilaria Mazzocco, a senior fellow in Chinese business and economics at the Center for Strategic and Internatio­nal Studies, a Washington think tank.