Experts Expecting More US Tariff Action on China This Year

Trade and economic policy experts are expecting the U.S. to emphasize tariffs as part of its economic security toolkit this year, which could lead to new duties on Chinese electric vehicles and other critical industries sometime in 2025.

Both Scott Kennedy and Ilaria Mazzocco, Chinese business and economics experts with the Center for Strategic and International Studies, said the “most significant trend” in U.S. economic policy toward China in 2024 will be an increased focus on tariffs. Kennedy, speaking during a Jan. 16 virtual event hosted by CSIS, said he’s expecting to see a rise in Chinese EV exports globally, which is “going to generate a lot of pressure around the world for fair trade actions” against Beijing.

“We've already seen that start in Europe,” Kennedy said, referencing the EU’s launch of a countervailing duty investigation on EV batteries from China in October (see 2310040012). “We're going to see that in the United States as well.”

Mazzocco agreed, saying 2024 “might be defined” by an increase in U.S. tariffs on China. She pointed to a December report released by the House Select Committee on China, which suggested revoking permanent normal trade relations status for China, along with other trade measures (see 2312120004). Mazzocco said addressing subsidies in China is “really front and center” of the committee’s recommendations (see 2312120004).

“We're going to continue to see more and more conversations about what the U.S. can do to limit the impact of exports from China into the United States,” she said. “Tariffs, I think, are going to be a big deal this year.”

Like Kennedy, Mazzocco specifically pointed to EVs, noting that “there's been a lot of talk about potentially increasing tariffs there,” including from Congress (see 2401090064). “There's definitely been a lot of concern, for example, in the clean tech space that cheap imports from China might undermine industrial policy in the U.S.,” including the Inflation Reduction Act, she said (see 2401120009).

“I think we'll definitely be hearing more conversations about it.”

Kennedy said U.S. duties will likely be in response to a rise in Beijing EV exports due to overcapacity in its EV industry. “I think because of the potential increase in Chinese exports in 2024, because of slow growth at home, and boosted [Chinese] production domestically,” Kennedy said, “we're going to see a revival and increased attention on tariffs in 2024 from the U.S.”

Although the U.S. may be trending toward more tariffs, that doesn’t necessarily mean any will be announced this year, said William Reinsch, the Scholl Chair in International Business for CSIS and a former Commerce Department official. He noted that antidumping and countervailing duty investigations usually take “between 12 and 15 months,” although that timeline might be “a little shorter” in investigations that address Chinese subsidies.

“One of the things I learned in my lifetime on the Hill was everything takes longer than you think it's going to take,” Reinsch said. “We're talking about things that will come to fruition in 2025, not in 2024.”

But even if no new tariffs are imposed this year, Kennedy said, any new investigation announcements will have a “chilling effect” on Chinese exports to the U.S. “So I think what we're going to see is just greater -- at a minimum -- greater discussion of these kinds of tools.”