Bidens tariff hikes on Chinas goods more bark than bite

Analysts view them as a symbolic move to woo voters ahead of presidential election

- Yew Lun Tian

While United States President Joe Biden has announced steep hikes in tariffs on a range of Chinese goods including electric vehicles (EVS), analysts say the actual impact on China is likely to be limited.

Higher tariffs of between 25 per cent and 100 per cent will be applied to US$18 billion (S$24.2 billion) worth of Chinese imports, Mr Biden told union and company representatives at an event on May 14.

The affected Chinese goods include steel and aluminium, semiconductors, EVs, critical minerals, solar cells and cranes, said the White House.

Analysts say the tariff hikes are a move by Mr Biden to woo voters ahead of the upcoming US presidential elections in November, and are more symbolic than impactful.

In a note, investment bank Nomura said that targeted products account for a mere 4.2 per cent of China's total exports to the US and less than 1 per cent of China's global exports.

The value of Chinese imports targeted this time also pales in comparison with the tariffs imposed on US$300 billion worth of Chinese imports from 2018 to 2020, ordered by then US President Donald Trump.

What is also worth noting is that the new tariffs are due to be phased in, with some taking effect only in 2026.