Tax battle in electric vehicles
Mr. Biden's decision was based on section 301 of the 1974 Commercial Act, allowing the US government to retaliate against trade activities that are considered unfair or violate global standards. Lael Brainard of President Joe Biden's National Economic Adviser explained that the application of the current tax rate for Made in China electric cars is to compensate for Chinese unfair operations and allowances. According to this move, it will create an equal playground for American car manufacturers and workers. Currently, the US electric car market has not yet recorded the official presence of large manufacturers from China such as BYD, Nio and Polestar.
Polestar is the only brand in this market through cooperation between Gily China and VOVO. Although most Po ST cars are manufactured in China, the company has plans to assemble cars at factories in South Carolina in the middle of this year. Besides, Neo and Zeekr two new IPO car manufacturers last week were also thought to be targeting the US market. Owen Tedford Senior Analyst at Beacon Policy Advisors said that previously the amount of Chinese electric cars imported into the US was relatively small, so the increase in taxes will not cause significant changes to the US market. However, US officials are concerned that Chinese electric cars will soon flood the US market.
The reason is that the battle for discounts is taking place fiercely in the second largest economy in the world with the participation of big men like BYD, Li Auto, Nio, Xpeng even Tesla. This makes the United States worry that Chinese manufacturers will seek to export to escape domestic difficulties. In February BYD, the car company was considered a direct competitor of Tesla to announce the plan to set up a factory in Mexico to serve the local market. However, the US government has planned to force Mexico to refuse incentives for Chinese manufacturers. In addition to electric cars, some other Chinese -wearing cars are also increased in taxes in this phase including solar, steel, aluminum and medical equipment. The tax rate for Lium ion battery type used for electric cars has been increased by the Biden government from 7.5% to 25% this year.
The tax rate for other batteries will be increased by 2026, the Chinese side expressed disappointment at this move of the White House, the spokesperson of Chinese Embassy Liu Pengyu rejected the US statement for the US for That Beijing encourages excess production to dominate global trade. Mr. Liu said that the United States is ready to strengthen cooperation with China for climate change but exaggerate the so -called excess capacity in the field of new energy and increase taxes on electric vehicles. China's solar products, according to him, increases the price of electric vehicles and solar cells will make the conversion of fossil fuels to renewable energy more difficult.
The impact of tax application
Although the new taxpayer on Chinese goods may not have a strong impact on the Chinese inflation and interest in the short term, this move is expected to lead to freezing in economic relations. America - China in the long term. For decades of these countries around the world, importing taxes is an effective measure to protect and promote the development of domestic industries. However, CNN cited from studies and history showing that the actual economic efficiency from import taxes is often not achieved as expected. Economists said that in the short term, this tax impact will not significantly affect the inflation and monetary policy of the United States.
For China, additional tax applications may also not create an immediate influence because China's leading electric car manufacturers are not significant presence in the US market while the power battery The sun is mainly exported through third countries. However, if viewed from a wider perspective, the economic picture becomes more complicated than this taxpayer is an omen that the US economic relations will fall into a state of freezing for a long time. . Joe Brusuelas Economist at RSMUS US said that the most recent US tax on Chinese goods took place under the former Donald Trump in 2018 and 2019 with the total value of goods affected by about 300. billion dollars. This policy is still being applied.
In the campaign of US President Mr. Trump once announced that if he was re -elected, he would apply a comprehensive import tax increase policy not only limited to Chinese goods, economists have warned. That this can lead to mass unemployment and increase.
Impact on economic growth
The Biden government is expected to apply new tax policy this year for most items. A few remaining faces will be applied in 2026, this decision is made in the context of the US labor market is showing positive signs with strong growth and demand for boiling consumption. dynamic.
However, the fight against inflation has not yet reached an end of the US Fed Department of Reserve to maintain a high level. Experts say that President Biden's tax increase plan will not create significant changes to the monetary policy of the United States. The new taxpayer almost does not affect inflation and GDP as well as the monetary policy will not consider this factor when considering adjusting interest rates, the economic expert at Oxford Economics said.
Impact on domestic production
The US economic history shows that imposing import taxes is not always as effective as expected, even causing negative impacts on domestic production. In 2002 former US President George Bush applied tax policy for imported aluminum and steel, studies later pointed out that this policy caused the US economy to damage about $ 30 million. The taxation also causes the production costs of steel use industries, leading to mass unemployment in the steel industry, especially in small -scale companies. 7 years later former President Barack Obama continued to apply tax increase policies for tires imported from China, although the move is expected to protect the domestic car manufacturing industry.
But the result is the opposite of this policy that caused a thousand workers in the American tire manufacturing industry to lose their jobs. In addition, US consumers also have to suffer up to 1.1 billion dollars due to the price of tires increasing, according to the research of the Peterson International Economic Institute. Most recently in 2019, a Fed study showed that the import tax policy applied by former President Donald Trump was not effective in promoting job growth in the manufacturing industry in the short term. . In contrast, this policy even caused a loss of incident, causing the price of commodity to increase due to increased cell costs and entailing retaliation from other countries.
Impact on consumers
Economic expert Doan Swit said that the application of import tax is more political significance than economic benefits. Swit said most economists think that import tax is a bad idea because it prevents the country from benefiting from labor specialization, interrupting the flow of products and services simultaneously. At the unreasonable resource, the import tax impact will cause retail distribution companies and consumers to suffer additional research costs in 2023 of the US International Trade Commission showing the selling classes for sale. It may suffer almost all expenses incurred, from policies, taxes and imports of former President Donald Trump.
The situation is even worse when some businesses are said to have taken advantage of the trade war to price goods. Some US -producing classes were found to export products to countries outside China, but they still increased their products on the reason of increasing import tax. The Fed New York report shows that the tax policy that former President Trump applied in 2018 has caused American family associations to pay an additional 419 dollar per year according to the time of positive impact on the economic pressure of pressure. Import tax is increasingly difficult to determine. The report of the National Economic Study NBER shows that if it comes to factors such as retaliatory tax import tax and agricultural allowance, the actual effect even this policy also causes impacts. Negative for businesses and jobs in the US.
The impact on the trade balance of the Covid-19 epidemic has significantly changed the impact of the former President Trump's import tax policy on the production and trade activities of the US before the pandemic broadcasting the enterprises imported into the importing enterprises. The US gun has started to seek supply instead of goods from China, but when the pandemic is currently in the shower and the demand for consumer consumption increases the amount of domestic warehouse quickly exhausted this, which makes the importing activities import. From China increased again according to Wells Faro's report in April. However, by the end of 2023 the amount of goods imported from the second largest economy in the world has decreased by 3% compared to 2019. Imported from some other Asian countries to the US increased by 50% NICO.
Economic expert at Wel VAG identifies part of the reason that may be because national businesses have moved the factory to other Asian countries to avoid import tax, when bringing goods into the United States of data. The recent maritime also tried to doubt Trump's state of the law to bring goods to the US to Mexico.