Carl Bildt
Trade barriers, tariffs and other protectionist tools are starting to feature more prominently around the world, often appearing under the heading of economic security. The decision by President Joe Biden’s administration this month to quadruple US tariffs on Chinese electric vehicles to 100 percent, as well as doubling the tariff on solar cells (to 50 percent) and more than tripling the tariff on lithium-ion EV batteries (to 25 percent), represents a momentous new step in this direction.
Until now, US restrictions on trade with China had been justified on national-security grounds, to prevent the Chinese military from acquiring sensitive technologies. While one could debate whether this policy made sense, it at least seemed to fit into a longer-term strategy. But these latest protectionist measures have nothing to do with China’s military capabilities. Instead, they aim solely to prevent cheaper, often better, green technologies from reaching US consumers.
The connection to the US election is obvious. Biden has been trying to head off Donald Trump by playing to the same protectionist sentiments that Trump, the presumptive Republican nominee, has been stoking for years. It was Trump, after all, who put the world on a new protectionist path when he imposed sweeping tariffs on steel, aluminium and many imports from China. Keen not to be outdone by Biden, he has already said that he would double the tariff on Chinese EVs from Mexico and apply additional ones to an even wider range of products.
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