The US’s decision to increase tariffs on renewable energy products imported from China in order to promote domestic production could lead to significant changes in global energy trade. On May 14, under the Inflation Reduction Act (IRA), the US administration decided to increase tariffs on $18 billion worth of imports from China, arguing that China’s low-priced export activities pose a threat to the US supply chain, businesses, and workers. This development is a major element in the ongoing US and China crisis.
In recent weeks, the US has expressed concerns about China’s domestic subsidies for clean energy production. Following these concerns, the US raised tariffs on imports from China to 100% on electric vehicles, 25% on electric vehicle batteries, 50% on solar cells, and 25% on certain steel and aluminum products. These actions have further intensified the US and China crisis.
Adrian Duhalt, a Research Fellow at the Columbia University Center on Global Energy Policy, evaluated the situation in an interview with Başak Erkalan from AA. Duhalt stated that the US and China crisis is likely to continue, and China could make changes in global energy trade by turning to new markets. Duhalt said, “China is trying to make a significant impact in industries related to energy transition. Blocked from entering the US, China will focus more on markets in developing countries.” The ongoing US and China crisis is driving China to seek alternative trading partners.
Kiel Institute Warns of Potential Tariffs on Chinese Electric Vehicles by the EU
The German Kiel Institute for the World Economy (IfW) has warned that the European Union’s (EU) potential tariffs on Chinese-made electric vehicles could disrupt electric car trade, adding another dimension to the US and China crisis.
IfW shared its analysis regarding the “potential anti-dumping tariff to be applied by the European Union (EU) Commission on Chinese-made electric cars.” The analysis stated, “If the EU imposes a 20% tariff on electric cars imported from China, this will have a noticeable impact on bilateral trade and production in Europe.” The analysis highlighted that a 25% decrease in imports of electric cars from China is expected, noting that the EU imported 500,000 electric vehicles from China in 2023. A 25% decrease would amount to approximately $4 billion, equivalent to an estimated 125,000 vehicles. This situation underscores the broader impacts of the US and China crisis on global trade dynamics.
Summary
The US and China crisis continues to evolve, with recent measures by the US to impose higher tariffs on Chinese renewable energy products. This move aims to protect domestic production but also signifies escalating trade tensions between the two economic giants. China’s response could involve redirecting its export focus towards developing markets, potentially reshaping the landscape of global energy trade.
Simultaneously, the EU’s considerations of imposing tariffs on Chinese electric vehicles add another layer of complexity to international trade dynamics. The Kiel Institute’s analysis suggests that such tariffs could significantly disrupt electric vehicle trade, affecting both China and the European market. As the US and China crisis unfolds, its ramifications are being felt globally, influencing economic strategies and trade policies worldwide. The ongoing US and China crisis is thus a pivotal factor in current global economic affairs.
In addition, the tiktok crisis between the United States and China continues Dec.
TikTok crisis escalates: Deconfliction between the US and China may increase
Technology competition and tension between the two countries are expected to increase after the US attempt to ban TikTok, the social media application owned by the Chinese company ByteDance, nationwide on Dec grounds of national security. The US considers TikTok a threat due to data security concerns and the company’s relations with the Chinese government.
