India may profit if the US increases taxes on Chinese imports
In an attempt to win over American voters during election season, the government of US President Joe Biden has chosen to impose fresh and higher tariffs on Chinese semiconductors, solar cells, electric cars, steel, aluminum, and medical equipment.
This action might lead to a new trade conflict between the two economies since it aims to increase the US’s competitive edge and create manufacturing employment in the country.
A White House statement on Tuesday said, “To protect US workers and businesses, Biden is directing his Trade Representative to increase tariffs under Section 301 of the Trade Act of 1974 on $18 billion of imports from China.”
In 2024, the US will increase the tax from 25% to 100% on Chinese electric cars (EVs).
China’s EV exports increased by 70% between 2022 and 2023 despite the dangers of overcapacity posed by subsidies and non-market behaviors. US manufacturers will be shielded from China’s unfair trade practices by a 100% tariff rate on electric vehicles.
It happens at a time when Chinese companies like BYD are putting more pressure on US EV manufacturers in global vehicle markets. Countries are racing to meet their demands for semiconductors.
By 2025, the US will impose a 50% tax on Chinese semiconductors, while in 2024, duties on certain steel and aluminum imports would increase from 0-7.5% to 25%.
In 2024, the 7.5% tax on lithium-ion electric vehicle batteries will rise to 25%. It will increase from 25% to 50% in 2024 for solar cells, from 0% to 25% in 2024 for ship-to-shore cranes, and from 0% to 50% in 2024 for syringes and needles.
According to the Global Trade Research Initiative (GTRI), India may be significantly impacted by this decision.
“China may be forced to dump these products in other markets, including India, as a result of the US imposing tariffs on EVs, batteries, and numerous other new technology items.” The Directorate General of Trade Remedies (DGTR) in India has to be on guard right now, according to GTRI.
