The US raises tariffs on imports of Chinese solar cells, polysilicon and tungsten products

The Biden administration plans to raise tariffs on solar cells, polysilicon and some tungsten products from China to protect American clean energy companies.

Tariffs on solar cells and polysilicon made in China will rise from 25% to 50% and duties on certain tungsten products will increase from 0% to 25% starting January 1, following a review of Chinese trade practices pursuant to Section 301 of the Trade Act of 1974, according to the notice from the Office of the United States Trade Representative.

“The tariff increases announced today will further mitigate the PRC’s harmful policies and practices,” Rep. Katharine Tai said in a statement. “These actions will complement domestic investments made during the Biden-Harris administration to advance a clean energy economy, while increasing the resilience of critical supply chains.”

Reports on Thursday indicated that U.S. and Chinese officials would meet this week and next for trade talks before the end of the year.

Last week, Washington tightened restrictions on Chinese access to advanced semiconductor technology. Beijing responded by banning exports to the United States of certain critical minerals needed to make computer chips, such as gallium, germanium and antimony. It also tightened its controls on graphite exports to the United States.

China provides a large portion of most of those materials, and the United States has been working to secure alternative sources in Africa and other parts of the world.

Tungsten is another strategically important metal whose production is dominated by China. The United States does not produce it, although South Korea is a possible major supplier. It is used to make weapons and in X-ray tubes and light bulb filaments, among other industrial applications.

U.S. imports of the metal from China fell to $10.9 million in 2023, compared with $19.5 million a year earlier.

After Beijing announced its ban on exporting gallium and the other materials to the United States, analysts said tungsten was another likely area where China could strike back.

Trade frictions have been escalating ahead of the inauguration of President-elect Donald Trump, who has promised to impose 60% tariffs on Chinese goods, among other threats. President Joe Biden has said Trump’s promise of sweeping tariffs on foreign imports would be a mistake.

His administration has kept in place the tariffs that Trump imposed during his first term, but says it has a more precise strategy.

China has sharply increased production of cheap electric vehicles, solar panels and batteries at a time when the Biden administration has championed measures to support those industries in the United States.

The United States and other trading partners say China improperly subsidizes exports, giving its exporters of solar panels and other products an unfair advantage in foreign markets, where their manufacturers charge lower prices thanks to government support. Washington also says China puts undue pressure on foreign companies to share technology.

China accounts for more than 80% of the solar panel market at all stages of production, according to the International Energy Agency, more than double domestic demand for those products. Its huge economies of scale have made solar energy more affordable, but have also concentrated the supply chain within China. The IEA has urged other countries to review their solar panel supply chains and develop strategies to address any risks.

In early 2018, the Trump administration imposed 30% tariffs on imports of Chinese solar panels. Beijing has filed a complaint with the World Trade Organization accusing the United States of unfairly supporting electric vehicle purchases.

The investigation that led the trade representative to increase tariffs on solar panels concluded with a report in May that has led to increases in tariffs on a range of products such as electric vehicles, syringes and needles, medical gloves and masks, semiconductors and products steel and aluminum, among others.

It has also raised tariffs on Chinese-made electric vehicles to 100% from 25%, and increased tariffs on Chinese lithium batteries to 25% from 7.5% previously.

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