In 2018, the Trump administration started a trade war with China by enacting multiple phases of tariffs under Section 301 of the Trade Act of 1974 to counter China’s “illicit trade practices.” The Biden administration left most of the China tariffs in place, and its expected assessments of their results are overdue. 

Over $300 billion in Chinese imports are subject to Section 301 tariffs. These include consumer goods, automobile vehicles, and industrial materials. Auto imports from China, including electric vehicles (EVs). are subject to a 25 percent tariff. 

Still, the Biden administration is considering raising tariffs on Chinese EVs and other clean energy products to protect U.S. domestic industries. Existing tariffs on Chinese clean energy imports have already impeded the U.S.’s progress in its clean energy transition. Expanding these tariffs would undermine the Biden administration’s goal of mitigating climate change. It would also create contradictory messaging for U.S. consumers, businesses, and our trading partners. 

The negative impact of tariffs is extensive and well-documented. As former deputy director-general of the World Trade Organization Alan Wolff recently wrote, high tariffs imposed by the U.S. and other countries in the 1930s severely impacted global economic growth. The Tax Foundation model estimated that the tariffs on Chinese imports imposed by both the Trump and the Biden administrations would lower long-run GDP by 0.21 percent, reduce wages by 0.14 percent, and lead to a loss of 166,000 full-time equivalent jobs. 

Tariffs inevitably lead to winners and losers across domestic industries. Imposing tariffs on imports in particular industries would raise the prices of imports and boost the demand for domestically produced goods. Other domestic industries that rely on imported goods for their production would also be harmed. For example, the Bureau of Labor Statistics concluded that the broad-based protectionist U.S. tariffs on steel imports in 2002 negatively affected many downstream industries that used steel imports as inputs by causing their prices to rise. A study by the American Action Forum finds that more than half of the cost burden of the Trump-Biden section 301 China tariffs falls on intermediate goods, which U.S. firms use as inputs in their production processes. In turn, the higher costs of inputs led to higher prices of finished goods in these industries. 

Tariffs on clean energy imports will slow down the U.S.’s transition to a clean economy. China is a major global player in manufacturing clean energy products, including EVs, solar products, and EV batteries. China manufactures approximately two-thirds of the world’s EVs, 80 percent of the world’s photovoltaic products, and owns more than 70% of the global EV battery manufacturing capacity. To successfully decarbonize the economy, the U.S. must trade with China in clean energy products to accelerate the shift away from fossil fuel consumption. Restricting U.S. consumers’ access to cheaper Chinese clean energy products would work against that. 

What’s more, escalating the trade war with China would risk further retaliation from China on U.S. exports. The solar tariff trade war between the U.S. and China during the Obama administration exemplifies why tariffs would cause more harm than good and how ineffective they are in boosting domestic industries.  

If the Biden administration extends and raises the tariffs on clean energy imports from China, it will create more unnecessary roadblocks for the U.S.’s transition to a net-zero economy and impede U.S. climate goals. Rather than extending and raising them, the Biden administration should remove existing tariffs on Chinese clean energy products to help accelerate the decarbonization of the U.S. economy.