The Biden administration unveiled on May 14 a slew of tariff rate hikes on $18 billion worth of annual Chinese imports, including solar cells, batteries and critical minerals, electric vehicles (EVs) and several other goods.

The move takes aim at China’s unfair trade practices and comes as the U.S. works to strengthen its manufacturing sector while pushing to lower greenhouse gas emissions and create jobs. The tariffs strategically target sectors in which the U.S. has made significant investments under the current administration. These include aluminum, batteries, critical minerals, EVs, medical products, semiconductors, ship-to-shore cranes, semiconductors and steel.

“China’s forced technology transfers and intellectual property theft have contributed to its control of 70[%], 80[%], and even 90 percent of global production for the critical inputs necessary for our technologies, infrastructure, energy and health care—creating unacceptable risks to America’s supply chains and economic security,” the White House said in a statement. “Furthermore, these same non-market policies and practices contribute to China’s growing overcapacity and export surges that threaten to significantly harm American workers, businesses and communities.”

The latest move in the escalating trade war between China and the U.S. leaves in place tariffs put in place by former President Donald Trump but introduces or significantly ramps up the tariff rate on several goods under Section 301 of the Trade Act of 1974.

The directive quadruples the tariff rate on EVs to 100% from 25%. The tariff rate on lithium-ion EV and non-EV batteries will increase to 25% from 7.5%, while the tariff rate for battery parts will increase to 25% from 7.5%.

Critical minerals including graphite, a key material for battery anodes, will also see tariff rates of 25% put in place.

Tariff rates on certain steel and aluminum products will rise to 25% as well, while rates on semiconductors and solar cells will double to 50%.

Cheap solar panels mainly from China have inundated the global market, including the U.S. Though solar developers have relied on inexpensive panels to improve project economics, some in the industry have called on regulators and legislators to bolster domestic solar manufacturing to create jobs and enable the transition to additional lower-carbon energy.

Incentives made possible by the Inflation Reduction Act, Bipartisan Infrastructure Act and the Defense Production Act have encouraged such development in the U.S.

The tariff hikes were seen as a positive move by the Solar Energy Manufacturers for America (SEMA) Coalition, which is still reviewing details of the tariff hikes.

“As America works to build out manufacturing in key clean energy supply chains to reduce the country’s reliance on China’s supply chains, we need to use every tool at our disposal to boost the U.S. solar manufacturing industry,” said Mike Carr, executive director of the SEMA Coalition. “The administration made the right decision to strengthen protections for solar components we seek to build in the U.S.”

Commenting on tariffs related to lithium-ion batteries for energy storage, American Clean Power President Jason Grumet said the decision recognizes the value of battery energy storage.

“As energy demand grows, battery energy storage is lowering costs for American families and businesses,” Grumet said in a statement. “Moreover, this emerging industry is building new manufacturing facilities and bringing thousands of jobs to communities across the United States.”

The rate increases are expected to take effect this year, with some exceptions. The new tariff on semiconductors takes effect in 2025, while the tariff rates on medical products—including a first-time 50% tariff on syringes and needles—take effect in 2026 along with the tariff rate on natural graphite, permanent magnets and lithium-ion non-EV batteries. The phased-in approach is intended to minimize market disruption as domestic production, such as for batteries, start to come online.

“Today’s announcement reflects President Biden’s commitment to always have the back of American workers,” the White House said. “When faced with anticompetitive, unfair practices from abroad, the president will deploy any and all tools necessary to protect American workers and industry.”

The tariff hikes are intended to level the playing field, the administration said.

However, it may not necessarily be good for consumers when it comes to price tags. After the importer pays, consumers typically end up paying for some of the higher costs.

“The new tariffs under President Biden may be a case of history repeating. If so, businesses will be braced for increasing supply chain costs and ultimately it will be U.S. consumers who pay for it,” Peter Sand, chief analyst at Xeneta, said in a statement. “Back in 2018, we saw the U.S. under President Trump impose a wide raft of tariffs on Chinese imports. China retaliated by imposing increasing tariffs of its own and this constant trading of blows saw ocean freight container shipping rates from China to the U.S. West Coast increase by more than 160%.”

In a May 14 press conference, China Foreign Ministry Spokesperson Wang Wenbin addressed the tariffs.

“China opposes unilateral tariffs that violate WTO [World Trade Organization] rules and will take all measures necessary to defend our legitimate rights and interests,” Wenbin said.

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