Why Biden’s China tariffs could hurt his climate agenda

President Biden is seeking to demonstrate his pro-manufacturing and anti-China credentials in a rematch with former President Donald Trump, but his broader climate change agenda could come at a cost.

Last week, Biden raised tariffs on electric vehicles, solar panels and battery technology, all important tools in the fight against global warming with significant ties to China.

The move comes as President Trump has repeatedly criticized Biden’s climate change goals ahead of the November election, saying they will harm workers in key battleground states.

The new 100% tariff on electric vehicles is not expected to have a significant impact on the current situation, as existing tariffs already largely shut out exports of Chinese-made cars. But the new tax could still prevent the world’s largest maker of affordable electric vehicles from selling its products in the United States.

Similarly, new import taxes on solar panels and batteries could slow down emissions reduction policies that are central to the energy transition.

Biden also imposed tougher tariffs on other products essential to the transition to renewable energy, including steel, aluminum, semiconductors, and minerals such as manganese, cobalt and aluminum.

“What Biden has done is emphasize that he prefers protectionism over decarbonizing the economy,” Robert Lawrence, director of the Trade Policy Program at Harvard’s Kennedy School, told The Hill. .

Former State Department official Rick Switzer was asked if tariffs on solar panels in particular would hinder the adoption of renewable energy in the United States, saying it would result in a “12-month delay in adoption in some areas.” He said it was highly likely.

But Switzer said trade barriers imposed by tariffs could also encourage investment in domestic industries and supply chains that are being redesigned to support the energy transition.

Switzer, who is in charge of science and technology issues at the U.S. Embassy in Beijing, said that “there are a lot of people who are sitting on the sidelines deciding whether or not to invest” in U.S. manufacturing, and this move could be a factor to encourage investment. He said there is.

The move comes as Mr. Biden curries favor with voters in battleground states, including major manufacturing hubs like Michigan and Georgia.

Asked about Biden’s new solar tariffs, Sen. Jon Ossoff (D-Ga.) said, “It’s good for my state to have a healthy and growing solar manufacturing sector in the United States. ” he said.

“I support the President’s targeted trade actions focused on ensuring that abusively subsidized Chinese solar products do not destroy U.S. solar manufacturing,” Ossoff said. I am grateful and have urged you to do so.”

He also called on the Biden administration to take “strong action” on implementing tax credits for renewable energy projects that use domestically produced components.

The administration’s move comes as President Trump and the Republican Party have broadly sought to paint the administration’s climate change policies as bad for American workers.

Earlier this year, Trump told supporters in Ohio that the auto industry would be in “a disaster” if he wasn’t elected, citing Biden’s efforts to accelerate the adoption of electric vehicles in the United States. .

Biden’s push for EVs became a major point of conflict with the United Auto Workers union, which ultimately supported Biden after receiving assurances from the administration and support from the president during a strike earlier this year.

While Republican lawmakers have voiced support for the protectionism reflected in Biden’s tariffs, they have criticized the measures as insufficient.

“Those tariffs are too late. They should have been imposed a long time ago. This is nothing but politics by the Democrats and the Biden administration,” Rep. Buddy Carter (R-Ga.) told The Hill. . “Look, we can’t compete with China in this situation.” [their companies] Subsidies are provided by the party. ”

Not all of the Biden administration’s policies take this same protectionist approach. The administration recently relaxed battery procurement requirements and allowed more cars to qualify for tax credits even if they contain some minerals from China.

This week, amid the tariff announcements, the administration made it easier for renewable energy producers to qualify for domestic content tax credits.

In fact, the administration’s overall move drew praise from the Sierra Club, an environmental advocacy group.

Patrick Drup, the group’s director of climate policy, said: “One of the best ways to tackle the climate crisis and deploy all the clean energy we need is to have a strong and robust manufacturing base here at home. ” he said.

“This was a nuanced, thoughtful, and excellent move by a government seeking to balance the need to build a domestic manufacturing base with the need to deploy solar power as quickly as possible,” Drapp said. .

But among the new measures announced this week, Chinese lithium-ion battery exports are likely to be hit with one of the most disruptive single tariffs in the new tranche. China is by far the largest exporter to the United States, accounting for $9.3 billion in total battery imports in 2022, according to data from UN Comtrade.

Pranati Kohli, an analyst on the trade and supply chain team at BloombergNEF, a commodity and energy research firm, said the tariffs would reduce the adoption of batteries, particularly those that power the energy storage technologies that enable solar and wind power generation. It is expected that this will have a particular impact. Use when it is not sunny or windy.

“There’s very little production in the U.S.” of this type of battery, Kohli said.

Additional tariffs on permanent magnets could be a “huge problem” for offshore wind, said Bloomberg policy writer Derrick Flacoll.

U.S. companies have expressed some hesitation about the bullish shift toward protectionism and Mr. Biden’s new tariffs themselves.

The National Association of Manufacturers, a trade group representing U.S. heavy industry, says, “Supply chains that have taken decades to build cannot be immediately rebuilt, especially those that provide the raw materials and components essential to daily life.” ” he said. statement on Tuesday.

The group encouraged the passage of more trade agreements and tariffs to prevent U.S. manufacturing from being “penalized by our own governments.”

Automakers have indicated they are willing to approve the tariffs, but the hikes are sudden and imply that it will take more time to build the electric vehicle production pipeline away from China.

“It won’t happen overnight, and it can’t happen,” the automotive innovation industry group said in a statement. “Complex global supply chains take time to form.”