| | | | |  | | By Ari Hawkins | | | — The White House will quadruple duties on Chinese imports of electric vehicles, teeing up a reaction from China as the Biden administration doubles down on his predecessors approach to tariffs. — The U.S. Export-Import Bank of the United States must address China’s control over the critical minerals supply chain to avoid alienating private-sector financing, according to public comments. — A senior Vietnamese labor official was recently arrested in a development that threatens to complicate the country’s push for favorable trade access. It’s Monday, May 13. Welcome to Morning Trade! I’m trying to hold on to that weekend feeling after checking the DC weather forecast. Now that's what I call a swamp! Send us your trade news. Reach us at: ahawkins@politico.com, gbade@politico.com and dpalmer@politico.com. You can also follow us on X: @_AriHawkins, @GavinBade and @tradereporter.
| | | | JOIN 5/22 FOR A TALK ON THE FUTURE OF TAXATION: With Trump-era tax breaks set to expire in 2025, whoever wins control of Congress, and the White House will have the ability to revamp the tax code and with it reshape the landscape for business and social policy. Join POLITICO on May 22 for an exploration of what is at stake in the November elections with our panel dissecting the ways presidential candidates and congressional leaders are proposing to reshape our tax rates and incentives. REGISTER HERE. | | | | | Want to receive this newsletter every weekday? Subscribe to POLITICO Pro. You’ll also receive daily policy news and other intelligence you need to act on the day’s biggest stories.
| | |  U.S. President Joe Biden speaks at the United Steelworkers Headquarters in Pittsburgh, Pennsylvania, United States on April 17, 2024. | Photo by Kyle Mazza/Anadolu via Getty Images | WHITE HOUSE PREPARES TARIFF HIKE: President Joe Biden will announce plans to quadruple tariffs imposed on Chinese EVs to above 100 percent tomorrow during an event to promote American jobs and investment, a person familiar tells POLITICO. The rundown: The measure is part of a larger batch of new tariffs expected to also hit Chinese-made batteries, critical minerals, solar products and steel and aluminum. The move aligns with other efforts from the administration to boost domestic production of clean energy products and semiconductors, including by working with Congress to pass the Inflation Reduction Act and the CHIPS Act, as concern mounts over China’s state-backed industries. The developments stem from a years-long Section 301 investigation into whether to alter restrictions on more than $300 billion of Chinese goods imposed during the Trump administration. The announcement is expected to come the day after officials from the American Iron and Steel Institute, a trade association, arrive in Washington to kick off a general conference. The Biden administration in some ways is doubling down on Trump’s approach to China with the new tariffs. The move would effectively raise Trump-era restrictions on Chinese EV tariffs to 102.5 percent, up from 27.5 percent currently. The United States has a standard 2.5 percent tariff on all imports of passenger cars, but Trump slapped an additional 25 percent tariff on Chinese vehicles as part of his trade war with Beijing. The former president has since pitched much more hawkish proposals, which have triggered push back from right-leaning economists. Keep in mind: The U.S. imports relatively few Chinese electric vehicles because of the existing tariffs. However, there is concern that those imports could increase because of the subsidies that China provides to its automakers. Some lawmakers, such as Sen. Sherrod Brown (D-Ohio), have urged a complete ban on imports of Chinese electric vehicles. Retaliation on tap: “China will take all necessary measures to defend its rights and interests,” Chinese Foreign Ministry spokesperson Lin Jian told reporters in Beijing in response to a question about potential new restrictions from the Biden administration on Friday. “We urge the U.S. to follow WTO rules, lift all additional tariffs on China [imposed in 2018 and 2019 by former President Donald Trump] and not to impose new ones,” Lin said. Greta Peisch, a partner at Wiley Rein who formerly was USTR’s top lawyer, told POLITICO that China’s response could be relatively restrained as long as Biden’s actions are “measured” and “targeted” — even though China could grumble loudly about it, she said. Doug and Gavin have more (for Pros!).
| | INDUSTRY URGES RISK MANAGEMENT: The Export-Import Bank of the U.S. should address concerns from investors over China's influence on the supply chain, industry stakeholders said in response to a request for comment to identify gaps affecting financing for critical minerals projects. “The U.S. and allied nations can produce and manufacture these materials domestically, but China’s market manipulation has made it nearly impossible for these producers to compete at a global scale, and in turn, has limited the availability of capital as investors are hesitant to invest in these projects,” per a submission from the Battery Materials and Technology Coalition, which represents 17 North American companies involved in battery materials. Financing mission: Industry representatives are pushing the agency for more certainty on financing, which includes implementing policies on price guarantees, stockpiling minerals and relaxing certain financing requirements, among various requests. The Cobalt Institute also encouraged the U.S. to pursue new critical minerals partnerships including with so-called “producer countries” such as the Democratic Republic of the Congo. Graphite especially: The batch of comments comes as graphite miners step up a lobbying push to urge the Biden administration to reinstate tariffs on graphite imports from China, according to Reuters. “Anti-competitive actions by Chinese firms such as predatory pricing schemes, value-added tax rebates upon export, and expansive state subsidies are just some of the many tools employed by the Chinese government and its affiliates which severely harm American graphite producers,” said a submission from the Vancouver-based South Star Battery Metals.
| | | | DON’T MISS POLITICO’S ENERGY SUMMIT: The future of energy faces a crossroads in 2024 as policymakers and industry leaders shape new rules, investments and technologies. Join POLITICO’s Energy Summit on June 5 as we convene top voices to examine the shifting global policy environment in a year of major elections in the U.S. and around the world. POLITICO will examine how governments are writing and rewriting new rules for the energy future and America’s own role as a major exporter. REGISTER HERE. | | | | | | | | | VIETNAM ARREST COULD CHALLENGE TRADE TALKS: Nguyen Van Binh, a senior Vietnamese labor reformer, was arrested supposedly for sharing state secrets, according to a report released last week. The development threatens to complicate the country’s push to be removed from a list of nations that the U.S. considers non-market economies. One step back: The arrest of Binch was first reported by The 88 Project, which monitors rights and civil liberties violations in Vietnam. Activist groups say he was targeted for his role as a reformer and support for independent trade unions, and that the arrest underscores a pattern of rising authoritarianism in Vietnam’s court system. Hearing in focus: The development came with all eyes on a hearing from Commerce last week, where representatives of Vietnam’s government pushed for the economy to be upgraded from non-market economy status, following a petition last year, a move which could lower tariffs. Commerce expects to complete its review in July, they said. Threat to progress?: Steptoe LLP partner Eric Emerson, who represented Vietnam's Ministry of Industry and Trade, argued at the hearing that the country has made enough progress to be removed from the restricted list. He said that government control over capital flows in Vietnam is “comparable” to countries like Malaysia, Thailand and Indonesia, which Commerce already considers as market economies. Reminder: Commerce must consider six issues in its determination under the law including currency convertibility, market rates and labor management, foreign investment restrictions, government control of production and government control of resources, as well as any other factors the department considers appropriate. PERU VIES FOR COOPERATION: The U.S. said it welcomes Peru’s application to join the Mineral Security Partnership Forum and agreed to shore up critical minerals and trade cooperation during an inaugural dialogue last week.
| | | — U.S. and Chinese delegations will meet in Geneva tomorrow to talk about the “technical risks” of AI, senior administration officials told reporters. — The National Association of Manufacturers signed an industry letter to the presidents of the United States and Mexico expressing concerns about the so-called “migrant crisis” and its role in supply chain disruption. — The Biden administration is sending Cabinet leaders around the country this week to celebrate the hundreds of billions of dollars in spending that POLITICO examined. — China slammed the use of export controls after the U.S. added 37 Chinese firms to a list of restricted entities. — Tesla seeks lower duties under EU electric vehicle probe, POLITICO Pro reports. — There’s another Chinese electric vehicle threat: Buses, per POLITICO Europe. THAT’S ALL FOR MORNING TRADE! See you again soon! In the meantime, drop the team a line: dpalmer@politico.com, gbade@politico.com and ahawkins@politico.com. Follow us @POLITICOPro and @Morning_Trade. | | | | Follow us on Twitter | | | | Follow us | | | | |
No comments:
Post a Comment