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Biden administration is expected to announce new tariffs on some Chinese goods

LEILA FADEL, HOST:

We expect the Biden administration to announce new tariffs on some goods from China this week. That's according to a source familiar with the tariff deliberations. The tariffs are expected to target strategic items that align with the president's policy priorities on climate and technology - for example, goods like electric vehicles and semiconductors. The administration will also announce it's decided to keep tariffs imposed on China by former President Donald Trump. They affect about $370 billion of imports each year. For more on what this means, we're joined by Gordon Hanson, who's an economist with the Harvard Kennedy School. Good morning.

GORDON HANSON: Good morning, Leila.

FADEL: So during the campaign four years ago, Biden criticized Trump's approach to trade with China. Now he's set to uphold these Trump-era tariffs and possibly broaden tariffs on other goods. So how different are these two presidents on this issue?

HANSON: So far, there's very little daylight between them. Donald Trump really undertook the most significant change in U.S. trade policy in decades. And whatever Biden had said on the campaign trail as president, he's done very little to change that new, more aggressive and interventionist trade policy that Donald Trump put in place.

FADEL: As someone who studies how tariffs affect jobs and voting, in your view, why is the Biden administration making these announcements now?

HANSON: Well, we have an election coming, in case folks haven't noticed.

FADEL: (Laughter).

HANSON: And putting tariffs in place and trying to send the message that the Biden administration is serious about taking on China, bringing jobs back to America is something that I think his administration or his campaign staff would think would work well on the campaign trail. Presidents often put tariffs in place around election time. Historically, that's come after an election, rewarding swing states for voting for you. And this is something that every president since Ronald Reagan has done. Joe Biden's innovation is to do this before an election.

FADEL: And what impact will these tariffs have?

HANSON: Well, what tariffs do is to put taxes on goods imported from abroad. And so quite straightforwardly, what that means is imported goods cost more and consumers are likely to buy less of them. Also, it puts some upward pressure on U.S. prices. That increase in prices means that consumers are likely to buy more U.S. goods of the same type, so more U.S. electric vehicles. And that might have some impact on employment in the production of electric vehicles in the U.S.

FADEL: And what does it mean for the regular consumer who's out there trying to buy electric vehicles and things like that?

HANSON: Well, consumers have had a hard time making the switch to EVs. They're concerned about the reliability of access to chargers, and they're very concerned about the cost. And so this is likely to slow the adoption of electric vehicles by American households considerably. And that's in part because China seems to have mastered the bottom end of the EV market. BYD, one of its biggest EV producers, has announced a new model called the Seagull, which it says it will sell for under 10 grand U.S. A EV at that price could lead to massive adoption of electric vehicles not just in the U.S. but in many other countries.

FADEL: Oh, so this actually could hurt Biden's efforts to get more Americans to drive electric cars in the end?

HANSON: It certainly could, and I think we should expect it will. So on the one hand, you might be inspiring some growth in manufacturing jobs, but on the other hand you're denting overall efforts to reduce greenhouse gas emissions.

FADEL: Gordon Hanson is an economist at the Harvard Kennedy School. Thank you so much for being on the program.

HANSON: Thank you, Leila. Transcript provided by NPR, Copyright NPR.

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