The Office of the U.S. Trade Representative has confirmed its plan to raise tariffs on a variety of goods manufactured in China. The tariff hikes, which were initially proposed in May, target strategic product categories such as electric vehicles, batteries, critical minerals, semiconductors, and solar cells. The finalized tariff structure encompasses 14 product categories, covering thousands of items.
Implications for Supply Chain Directors
The first wave of tariff increases is scheduled to take effect on September 27, with subsequent hikes planned for the beginning of 2025 and 2026. Notably, the Biden administration has approved a 100% tariff on electric vehicles, a 25% tariff on lithium-ion EV batteries, and a 50% tariff on photovoltaic solar cells for this year. A 50% tariff on semiconductors produced in China will be implemented in 2025.
Additional Tariff Details and Exclusions
The finalized plan offers some relief for ship-to-shore cranes, which will face a 25% tariff starting this year. However, the final structure will permit exclusions for cranes ordered before May 14, 2024, and that enter the U.S. before May 14, 2026.
The updated tariff structure also includes increased rates for medical supplies. The administration’s initial proposal of a 25% tariff on face masks will still be implemented this year, followed by a 50% tariff in 2026. Similar action has been taken on medical gloves, with the initial 25% tariff proposal being increased to a 50% tariff in 2025 and a 100% tariff in 2026.
Lastly, the number of permitted exclusions for solar manufacturing equipment has been reduced from 19 to 14, with five exclusions for solar manufacturing module equipment being eliminated.
The federal agency had previously committed to finalizing the new tariff structure by the end of last month, but the process was delayed by two weeks.
The Biden administration’s confirmation of tariff hikes on Chinese goods will have significant implications for supply chain directors and their operations. With targeted product categories and scheduled tariff increases, supply chain professionals will need to adapt quickly to mitigate the impact on their businesses.
