India May Gain As US Hikes Tariffs Steeply On Chinese EVs, Batteries, Medical Supplies
The biggest increase is the quadrupled hike in tariffs on electric vehicles from the current 25% to 100%, starting 2024.
In what may be construed as an extension of the United States' ongoing diversification plan from China, US Trade Representative Katherine Tai announced a tariff hike on Chinese-origin products like batteries, electric vehicles, semiconductors, steel, aluminium, and medical supplies, among others.
The biggest increase is the quadrupled hike in tariffs on electric vehicles from the current 25% to 100%, starting 2024. Reuters reported that the impact of the move could be on $18 billion worth of Chinese goods.
This could open export potential for India and other south Asian economies like Vietnam—which have some established ground in electronics and semiconductor exports—in the short-term.
The move also signals rising protectionism while underscoring the country's strategy to cut its reliance on Chinese goods, ahead of elections in the country in the later part of 2024.
These proposed increases, some starting from 2024, are aimed at combating what it deems as unfair trade practices by China. According to the United States Trade Representative's official release, this comes on the back of a statutory four-year review that began in 2022.
The US report noted that the People's Republic of China had not eliminated many of its technology transfer-related acts, policies, and practices, which they perceived as a "burden or restriction on US commerce".
It also alleged that China persisted, and in some cases became aggressive, through cyber intrusions and cyber theft in its attempts to acquire and absorb foreign technology.
After thorough review of the statutory report on Section 301 tariffs, and having considered my advice, President Biden is directing me to take further action to encourage the elimination of the People’s Republic of China’s unfair technology transfer-related policies and practices that continue to burden US commerce and harm American workers and businesses.Ambassador Katherine Tai, US Trade Representative
According to former Indian Trade Service Officer Ajay Srivastava, the move could lead to possible dumping by China but also open the door for export opportunities for India.
The higher duties on Chinese face masks, syringes and needles, medical gloves and natural graphite presents a significant opportunity for India, said the co-founder of the Global Trade Research Initiative.
"By ramping up production and export of these in-demand products, India could enhance its trade footprint in the US market. India may not get any export advantage on remaining products like the EVs and semiconductors as India is the net importer of these products," he added.
