US President Joe Biden’s administration plans to raise tariffs on solar wafers, polysilicon and some tungsten products from China to protect US clean energy businesses.
The notice from the Office of US Trade Representative (USTR) said tariffs on Chinese-made solar wafers and polysilicon would rise to 50 percent from 25 percent and duties on certain tungsten products would increase from zero to 25 percent, effective on Jan. 1, following a review of Chinese trade practices under Section 301 of the US Trade Act of 1974.
The decision followed a public comment period after the USTR said in September that it was considering such actions.
Photo: AP
“The tariff increases announced today will further blunt the harmful policies and practices by the People’s Republic of China,” US Trade Representative Katharine Tai (戴琪) said in a statement. “These actions will complement the domestic investments made under the Biden-Harris Administration to promote a clean energy economy, while increasing the resilience of critical supply chains.”
Last week, Washington tightened restrictions on Chinese access to advanced semiconductor technology. Beijing responded by banning exports to the US of certain critical minerals needed to make computer chips, such as gallium, germanium and antimony. It also stepped up its controls on graphite exports to the US.
China provides a very large share of most of those materials, and the US has been working to secure alternative sources in Africa and other parts of the world.
Tungsten is another strategically vital metal whose production is dominated by China. The US does not produce it, but South Korea is a potential big supplier. It is used to make armaments and is also used in X-ray tubes and light bulb filaments, among other industrial applications.
US imports of the metal from China fell to US$10.9 million last year from US$19.5 million the year before.
Trade frictions have been escalating ahead of the inauguration of US president-elect Donald Trump, who has vowed to impose 60 percent tariffs on Chinese goods, among other threats. Biden’s administration has kept in place tariffs that Trump imposed during his first term in office, but says it has a more targeted approach.
China has sharply ramped up production of cheap electric vehicles (EVs), solar panels and batteries at a time when the Biden administration has championed moves to support those industries in the US.
The US and other trading partners say China improperly subsidizes exports, giving exporters of solar panels and other products an unfair advantage in overseas markets, where its manufacturers charge lower prices thanks to government support.
China accounts for more than 80 percent of the market for solar panels at all stages of production, according to the International Energy Agency, which is more than double its domestic demand for those products. Its huge economies of scale have made solar power more affordable, but also concentrated the supply chain inside China.
The agency has urged other countries to assess their solar panel supply chains and develop strategies to address any risks.
The US dollar was trading at NT$29.7 at 10am today on the Taipei Foreign Exchange, as the New Taiwan dollar gained NT$1.364 from the previous close last week. The NT dollar continued to rise today, after surging 3.07 percent on Friday. After opening at NT$30.91, the NT dollar gained more than NT$1 in just 15 minutes, briefly passing the NT$30 mark. Before the US Department of the Treasury's semi-annual currency report came out, expectations that the NT dollar would keep rising were already building. The NT dollar on Friday closed at NT$31.064, up by NT$0.953 — a 3.07 percent single-day gain. Today,
‘SHORT TERM’: The local currency would likely remain strong in the near term, driven by anticipated US trade pressure, capital inflows and expectations of a US Fed rate cut The US dollar is expected to fall below NT$30 in the near term, as traders anticipate increased pressure from Washington for Taiwan to allow the New Taiwan dollar to appreciate, Cathay United Bank (國泰世華銀行) chief economist Lin Chi-chao (林啟超) said. Following a sharp drop in the greenback against the NT dollar on Friday, Lin told the Central News Agency that the local currency is likely to remain strong in the short term, driven in part by market psychology surrounding anticipated US policy pressure. On Friday, the US dollar fell NT$0.953, or 3.07 percent, closing at NT$31.064 — its lowest level since Jan.
The New Taiwan dollar and Taiwanese stocks surged on signs that trade tensions between the world’s top two economies might start easing and as US tech earnings boosted the outlook of the nation’s semiconductor exports. The NT dollar strengthened as much as 3.8 percent versus the US dollar to 30.815, the biggest intraday gain since January 2011, closing at NT$31.064. The benchmark TAIEX jumped 2.73 percent to outperform the region’s equity gauges. Outlook for global trade improved after China said it is assessing possible trade talks with the US, providing a boost for the nation’s currency and shares. As the NT dollar
PRESSURE EXPECTED: The appreciation of the NT dollar reflected expectations that Washington would press Taiwan to boost its currency against the US dollar, dealers said Taiwan’s export-oriented semiconductor and auto part manufacturers are expecting their margins to be affected by large foreign exchange losses as the New Taiwan dollar continued to appreciate sharply against the US dollar yesterday. Among major semiconductor manufacturers, ASE Technology Holding Co (日月光), the world’s largest integrated circuit (IC) packaging and testing services provider, said that whenever the NT dollar rises NT$1 against the greenback, its gross margin is cut by about 1.5 percent. The NT dollar traded as strong as NT$29.59 per US dollar before trimming gains to close NT$0.919, or 2.96 percent, higher at NT$30.145 yesterday in Taipei trading
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