The China-U.S. strategic competition took a dramatic turn last week, as the Biden administration fired a fresh salvo in the form of substantial tariff hikes on a range of Chinese imports critical to the clean energy transition. The move, which targets electric vehicles (EVs), solar cells, lithium-ion batteries, and critical minerals, came as a surprise to many, given the seemingly amicable climate discussions between the newly appointed U.S. and Chinese climate envoys, John Podesta and Liu Zhenmin, just days earlier.
While the timing of Biden’s decision to impose steep tariffs on Chinese EVs and other clean energy imports may seem politically motivated, given the upcoming U.S. elections, he had compelling reasons to act. As Nobel Prize-winning economist Paul Krugman argued, the Biden administration’s ability to secure substantial subsidies for renewable energy through the Inflation Reduction Act (IRA) was contingent upon tying…
