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President Biden has expressed concern that an influx of affordable Chinese products could endanger American industries. However, recent trade data indicates that imports of Chinese steel have significantly dropped, and US-China trade imbalance is at a post-COVID low. Despite this, Biden’s team is still anxious over certain indicators from China and Europe, such as China’s increasing production of large goods, surpassing domestic demand.
Chinese state-backed loans have kept at-risk companies afloat in their flagging economy, providing cost advantages for goods like steel and electric cars. The low-cost Chinese exports have particularly affected the US solar industry and are causing tensions throughout Europe, posing a potential threat to American companies supported by Biden’s 2022 climate law.
To prevent similar issues, Biden plans to introduce protective measures against alleged Chinese trade manipulations for American companies such as steel manufacturers and car makers. European leaders are grappling with how to deal with the surge in imports, an issue highlighted during Chinese President Xi Jinping’s recent visit.
In the US, the effect of cheap Chinese imports has been felt before, with the domestic solar industry suffering from an influx of affordable solar panels. The same issue is recurring, causing US manufacturers to postpone investments.
The Biden administration is closely monitoring Chinese production rates and prices, aiming to curb the influx of subsidized Chinese imports, especially in sectors critical to Biden’s industrial strategy.
Biden intends to impose higher tariffs on Chinese steel and aluminum and has started probing Chinese automotive technologies. Reviews are underway on existing tariffs on Chinese goods, with some potentially increasing for strategic industries. However, Chinese officials refute these accusations, stating they are politically motivated and meant to impede China’s progress.
Biden officials have voiced concerns that Chinese subsidized exports are beginning to harm US manufacturers, driving some component suppliers for US-made products out of business.
To counter China’s export strategy, some believe a global effort is necessary, involving cooperation between the US, Europe, and other allies. This might also involve emerging economies like Brazil and India who have started to push back against China’s trade practices. Such a global effort could safeguard the investments of US companies in sectors like advanced batteries by mitigating competition from artificially cheap imports.
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