Press Briefing by Press Secretary Karine Jean-Pierre and United States Trade Representative Katherine Tai

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MS. JEAN-PIERRE: It’s raining outside.

Okay. So, as you just saw today, the President directed his Trade Representative to increase tariffs under Section 301 of the Trade Act of 1974 on $18 billion of imports from China.

This action will protect American workers and businesses from China’s unfair trade practices. As you’ve heard the President often say, American workers and businesses can outcompete anyone as long as the competition is fair.

Our U.S. Trade Representative, Ambassador Katherine Tai, is here to share more on the President’s announcement and take some of your questions.

And with that, I will turn it over to Ambassador Tai. Welcome to the briefing room for the first time.

AMBASSADOR TAI: Thank you so much.

Well, good afternoon, everyone.

President Biden has consistently been clear that he will take action to defend American workers and businesses from the unfair trade practices of the People’s Republic of China.

Today, he is once again keeping that promise.

President Biden and bi- — and I both know that American workers and businesses can outcompete anyone as long as the competition is fair.

But for too long, the PRC has been playing by a different set of rules with unfair and anticompetitive economic practices. Those unfair practices include forced technology transfer, including cyber hacking and cyber theft; non-market policies, such as targeting industrial sectors for dominance, labor rights suppression, and weak environmental protection; and flooding markets worldwide with artificially cheap products that wipe out the competition.

The President’s action today is a part of his vision to rebuild our supply chains and our ability to make things in America to lower costs, outcompete the PRC, and encourage the elimination of practices that undercut American workers and businesses. We are doing that by investing in manufacturing and clean energy here at home and raising tariffs to protect these investments.

I conducted a statutory review of the PRC’s forced technology transfer and other intellectual-property-related practices, which were the subject of the 2018 Section 301 investigation.

In that review, I found that the PRC continues to deploy these unfair trade practices. And I conveyed my findings to the President in a report, which is available on the USTR website.

It is clear that the previous administration’s trade deal with the PRC failed to increase American exports or boost manufacturing. In fact, China’s exports in some critical sectors, like EVs and batteries, actually increased.

In response, President Biden, today, signed a memorandum directing me to increase tariffs on critical manufacturing and mining sectors, including steel and aluminum, semiconductors, electric vehicles, batteries, solar cells, and certain critical minerals. The increased tariffs are expected to cover approximately $18 billion of trade.

The President also directed a process to request excluding certain production machinery from the tariffs to permit solar and clean manufacturers to purchase equipment while diversifying their suppliers.

Next week, I expect to issue a public notice that conveys the specific tariff lines, tariff rates, and timing for the proposed increases, along with the details of the machinery exclusions process.

This strong action by the President is strategic. As he has said, we do not seek to constrain China’s economic development, but we will insist on fair competition and defend American workers from the PRC’s unfair practices.

Today’s direction by the President defends American workers and businesses from the PRC’s artificially cheap products, whether EVs or steel or critical minerals or semiconductors.

I also want to emphasize that we continue to consult with our partners and our allies who face similar threats from the PRC’s unfair trade practices and are also voicing their concern with those unfair practices and taking action. Our partners are essential to addressing the broader threat to our working families and businesses.

Today’s strong tariff announcement is an important part of President Biden’s worker-centered trade policy, which is about using trade to empower workers and making sure that they can compete fairly and thrive, and supports the historic investments we have already made here at home.

I can now take your questions.

MS. JEAN-PIERRE: All right. Go ahead, Aamer.

Q Thank you, Ambassador. First, there seems to be some confidence that these tariffs won’t cause the competition to slide into conflict with China. If you could just explain a little bit about why you are so confident.

And then, secondly, BYD is looking to build EV factories in Mexico that could flood the U.S. market. Why isn’t the administration preemptively announcing tariffs to hit these vehicles?

AMBASSADOR TAI: So, you actually asked two questions.

Q Yeah, I did. Sorry. (Laughter.)

AMBASSADOR TAI: Yes. So, let me begin with the first, which is that we’ve been very, very clear about the strategic nature of this tariff review process and the focus on ensuring that the actions that are announced will be effective in leveling the playing field, giving our workers and our businesses the chance to continue to compete and to thrive against an onslaught of really, really challenging measures and a challenging economic system that is coming from Beijing.

We have been clear about this with the American public.

We have also been equally clear about this with our counterparts in Beijing. Every single one of us, from the President on down, over the course of the last three years, have made clear the challenges that we are facing, the nature of that challenge, and the need for us to act. Because we know what happens if we don’t act and we don’t defend: We will see the same patterns repeated over and over again.

So, what we are doing today should by no means be a surprise to our counterparts in Beijing. We have made clear this is not about escalation. This is about the consequences of decades of economic policy and the need for the United States to defend our rights.

MS. JEAN-PIERRE: Oh, and there was the second question.

AMBASSADOR TAI: And the second question was on the EVs and BYD in Mexico. At USTR, that is exactly what we are built to worry about and to be concerned with. That will require a separate pathway. This is about imports from China. What you’re talking about would be imports from Mexico. Equally important — something that we were talking to our industry, our workers, and our partners about. And I would just ask you to stay tuned.

MS. JEAN-PIERRE: Go ahead, Nancy.

Q Thanks, Ambassador. When Trump hiked tariffs on Chinese goods, it led to some increased prices for U.S. customers. How can you be sure the same thing won’t happen again?

AMBASSADOR TAI: First of all, I think that that link, in terms of tariffs to prices, has been largely debunked. What I would say — what I would say is that what the President has instructed that we do is to focus on making our supply chains more resilient. That means we need more options. That means here in America, we need to have more manufacturing capacity. Resilient supply chains means that we will be able to insulate the American economy from the kinds of price spikes and the inflationary dynamics that we have seen that have come primarily from the supply chain challenges we’ve experienced first from the pandemic, next from Russia’s invasion of Ukraine.

If you think back to March of 2020 and you think about how much a face mask cost, it’s a trick question. The answer is you did not have enough money to buy a face mask because there just weren’t enough in the world to go around. So, it is with that in mind that these actions are being taken. It is, in fact, to address those types of challenges that no one wants to experience again.

Q The U.S. government is subsidizing the EV industry here pretty significantly. How is that different from what the Chinese government is doing?

AMBASSADOR TAI: So, if you take a look at the Chinese economic model, what you see is a system of state support that is built to dominate and take over entire industries. So, this is what I mean by, “We’ve seen the pattern” — steel and aluminum, solar panels, batteries, EVs.

Today, China’s production capacity in steel is 55 percent of world capacity — that’s in one country; aluminum, 60 percent; EVs, 60 percent; solar, 80 percent; and in certain critical minerals, 85 to 95 percent. So, those are subsidies with an aim to cornering the world market and achieving dominance and creating dependency.

The types of support that we’re talking about here are defensive in nature. They’re about creating the space to compete, the space to thrive, the space to survive the kind of onslaught that we are seeing across the board.

MS. JEAN-PIERRE: Go ahead, Steve.

Q Did the President signal to President Xi in their most recent conversation that this might be happening soon?

AMBASSADOR TAI: So, let me put it this way. Again, from the President to Secretary Yellen, Secretary Blinken, in my own engagements with counterparts from Beijing, we have been very, very clear about the sobriety with which we approach the U.S.-China trade and economic relationship. It needs to be fair.

I did offer my counterpart the courtesy of a notification. This does not come as a surprise — should not come as a surprise to our counterparts in Beijing.

Q The notification — was that today or yesterday or —

AMBASSADOR TAI: That was the — a prenotification.

Q Thank you.

Q Thank you, Ambassador Tai. I know that these new tariffs are seen as more targeted and strategic, but the administration has chosen to keep in place those Trump-era tariffs on some 300 billion dollars’ worth of goods, which Biden himself had said in 2019 that Americans are paying for. So, why make that decision to keep it in place? And aren’t you concerned that it’s going to keep prices elevated?

AMBASSADOR TAI: So, first of all, let me say a couple things. In terms of the price that Americans paid for in the previous era, some of that — well, maybe a lot of it was about the chaos and unpredictability that it created and the — the escalation that resulted. All right?

Secondly, I think what — I’m — I’m a trade lawyer by training, and, at USTR, we are deep into the technical issues. The Section 301-based review that we undertook required us to look at a couple of questions. One of them was the effect of the practices on our economy. And there you have our response, which is a targeted strategic response that is meant to work together with the investments that we’re making.

The other aspect that we had to look at was the effect of the tariffs on changing China’s behavior with respect to the IPR abuses and the forced tech transfer. There, the findings in my report, which you can find on the USTR website, right here — it’s a serious report — is that not only have we not seen the problematic practices subside in some areas, we have seen them get worse.

And in that light, there is actually no reason for us and no justification to relieving the tariff burdens on the trade with Beijing.

Q And just quickly, what do you say to critics who say that by putting these high tariffs on Chinese EVs, you’re leaving American consumers with fewer options, more expensive cars, as China is very far ahead in creating very cheap EV cars?

AMBASSADOR TAI: I think what you have to do is remember and revisit the story and the show that we have been a part of for the last several decades, which is as you allow China to dominate the supply and the production in these industries, your choice is actually made for you. You have fewer choices, and it — it lays our entire economy — from consumers and workers, all the way up to our government — susceptible to the kinds of coercion that we’ve seen from a government who was willing to weaponize the dependencies that it has created when a partner does something that it does not like politically.

MS. JEAN-PIERRE: J.J.

Q On Mexico, you said, “Stay tuned.” Are you saying that there could be some changes to the USMCA rules or to the — to the law that would allow the U.S. to apply tariffs on goods from China that originate in Mexico or other third countries?

AMBASSADOR TAI: What I’m saying is the fact pattern that’s developing is one that is of serious concern to us and that, at USTR, we are looking at all of our tools to see how we can address the problem.

Q Specifically from Mexico or from other third countries as well?

AMBASSADOR TAI: I think just the general fact pattern.

Q Is there anything else you can say to elaborate on the problem?

AMBASSADOR TAI: Stay tuned.

Q Okay.

MS. JEAN-PIERRE: Go ahead. Go ahead.

Q Yeah, thanks, Karine. Thanks, Ambassador.

So, this is an election year. Why did it take three years to impose these tariffs?

AMBASSADOR TAI: So, this is where I put my lawyer hat back on. Under the 301 statute, in the fourth year of the tariffs, if there is a stakeholder that is benefiting from the tariffs who asks us to keep them, we keep them. That is what happened in 2022, because the tariffs first went on in 2018.

As a result of that, in the fall of 2022, we started a process. We opened up a portal — that was open, I think, in the end of ‘22 to the very beginning of ‘23 — notice and comment. We wanted to hear from all of our stakeholders, their views on the tariffs, the pros and the cons, please inform us. That — that elicited, I think, about 1,600 comments. So, that’s at the beginning of 2023.

And then we started a whole-of-government interagency review within the Biden administration. That process has taken us to today and the unveiling of this finalized package, which the President approved.

Q So, it’s — it took three years to — to figure out the Chinese were flooding the market and stealing technology? I mean, it’s pretty evident that they’ve been doing that all along.

AMBASSADOR TAI: No, it took — it took a year and a half for the course of the review. You will see the amount of care that we put into our investigation and our findings. Yes, there continue to be problems. But then the question is: What do you do about the tariffs?

For this administration, it is extremely important that we approach a relationship, like the one between the U.S. and China, and these issues around the industries and the jobs of the future with discipline. That’s what takes so long, is the design and the architecture of the tariff defense system that you will see.

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Q Thanks a lot, Karine. In regards to the President’s plans to increase tariffs that he announced earlier today, is there an expectation that China will retaliate? And if indeed that happens, what should American consumers plan for in terms of increased prices that they pay for on a variety of Chinese goods?

MS. JEAN-PIERRE: So, I think the Ambassador addressed this question a little bit.

And what I will say is: There’s no need for a trade war. There isn’t. And we’ve been very clear — and the Ambassador said this at the — at the podium just moments ago, obviously — that we have been very clear about this. We’ve been very vocal about — about where — what the President — how the President believes we should move forward. He wants to do this in a smart and strategic way. That’s what you see. And it’s not just the tariffs. It’s an investment.

You hear talk — him talking about investing in America, making sure that manufacturers are coming back. We have created almost — nearly 800,000 manufacturing jobs. So, there is an investment piece, not just a tariffs piece.

And the President has been also very clear: This is about American workers. This is about American companies. This is about protecting them. And we have been also very clear that China’s policies, trade policies have been unfair. And we’ve had concerns.

You heard the Ambassador talk about how you’ve seen Cabinet-level conversations about this over — over the year. And we’ve been also very consistent about that.

Whether it’s Secretary Yellen, Secretary Blinken — they’ve been the most recent — recent secretaries to have traveled to Beijing to — and this came up — to have those conversations.

And so, look, there’s no need — there’s no need for a trade war. That is not what we’re — this is not what this is about. This is about protecting, again, American workers. This is about protecting American businesses, making it more fair so that we can compete. And we believe that with — with a fair scenario here that we can outcompete.

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Q Taiwan is going to hold its inauguration next Monday. Does the administration expect any changes in policy with the incoming President Lai? And then, you know, are you seeing any signs that China may try to use this occasion to act aggressively or in a coercive way?

MS. JEAN-PIERRE: I mean, look, I — I can’t speak for what China is going to do or not do. I’m not, you know, obviously, in — in the head of President Xi. But we’ve been — we’ve been very clear about where we stand with our One China policy. Nothing has changed there.

And, look, I would have to let — let the leader of — the leader speak for himself. I just don’t have anything to add beyond that. We will see. We will see.

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Q Hi, Karine. Picking up on your last answer that you don’t believe that this is a tax on Americans making under $400,000 a year. Some Democrats, including Jared Polis, the governor of Colorado, have come out and said that “tariffs are a direct, regressive tax on Americans and this tax increase will hit every family,” calling it “horrible news.” How do you respond to that?

MS. JEAN-PIERRE: Look, I mean, it’s very much to what I’ve been saying. This is — this is truly about — what the President wanted to do — he wanted to make sure that this was done in a smart and strategic way. That’s what this announcement is about. It’s about making sure that we address the unfair policies that we have seen from China. And this is what this does.

American workers and businesses can out- — can outcompete anyone if we actually create a competition that is fair. And that’s what you’re seeing from this President.

We have been also very clear that we do not want to see a tax crease — increase for anyone making under $400,000. That has also been our — our approach on this as we talk about the economy, as we talk about making sure that we’re building an economy from the bottom up, middle out. We want this to make sure that we’re not leaving anyone behind.

This is a smart and strategic approach from this President. These tariffs are targeted at critical industries, where his — his Investing in America agenda is spurring a manufacturing boom. He is coupling investment with actions to protect American workers and to protect businesses as well.

That’s our approach here. That’s how we’re going to move forward.

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Source: The White House

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