Trade war is ramping up now

The “quiet” trade war that has been underway between the U.S. and China for a few years now is getting louder.

A recent series of punitive actions by both countries is making their ongoing dispute “more explicit,” says Christopher S. Tang, distinguished professor and Edward W. Carter Chair in business administration at the UCLA Anderson School of Management.

The Biden Administration, in addition to maintaining the tariffs broadly imposed by the Trump Administration on many Chinese imports, recently announced even tougher measures, covering an additional $18 billion in goods from China, “to protect American workers and businesses.” They include a boost in the tariff rate on steel and aluminum products to 25% from a previous high of 7.5%, and on semiconductors to 50% from 25%.

An even more radical move by the White House was an announced increase in tariffs on electric vehicles manufactured in China from 25% to 100%. It appeared calculated to head off the flood of cheap Chinese EVs that is otherwise expected to hit U.S. shores in the next few years.

In addition, the U.S. Department of Commerce has revoked licenses allowing Intel, Qualcomm and other American chipmakers to ship product to China’s Huawei Technologies for use in laptops and handsets. And in response, China has directed its government offices not to purchase personal computers containing any American-made chips at all.