New US rules to exacerbate trade dispute with China

China warned the United States on Monday not to take “discriminatory actions” against its firms, following reports Washington is planning to ban the sale of vehicles using Chinese and Russian technology.

Bloomberg and other media reported Sunday, citing sources, that the United States was mulling new rules that would ban hardware and software made in China from its vehicles.

Asked about the reports, foreign ministry spokesman, Lin Jian, said China urged, “the US to respect market principles and provide an open, fair, transparent, and non-discriminatory business environment for Chinese enterprises”.

“China opposes the US’s broadening of the concept of national security and the discriminatory actions taken against Chinese companies and products,” Lin said.
“China will resolutely safeguard its legitimate rights and interests,” he added.

The rules, if confirmed, would mark the latest escalation of a simmering trade row between the US and China.

In May, Washington unveiled steep tariff hikes on Chinese imports like electric vehicles and semiconductors.
The tariff hikes hit $18 billion worth of Chinese imports, targeting strategic sectors like EVs, batteries, critical minerals and medical products, the White House said.

The tariff rate on EVs is set to quadruple to 100 per cent this year while the tariff for semiconductors will surge from 25 per cent to 50 per cent by next year.

Those plans were finalised this month, ahead of November’s presidential election, where both Democrats and Republicans are seeking to show a tough stance on China as competition between both countries intensifies.

The tariff hikes on the $18 billion worth of goods were taken after a review of levies imposed under then-president Donald Trump, which impacted some $300 billion in goods from China.

Apart from tariff increases including those on solar cells, the US Trade Representative’s office confirmed that a 50 percent duty on semiconductors — a sharp rise from before — would start in 2025.

US President Joe Biden has accused Beijing of “cheating” rather than competing on trade.

AFP