The United States Imposes More Pressure! Tariffs Increased to 100%

According to a statement from the Office of the United States Trade Representative, as reported by CCTV News, on September 13th local time, the Biden administration in the United States announced that the U.S. has finalized the decision to increase tariffs on certain Chinese-manufactured products.

As per a report from the Securities Times, based on a notice issued by the White House, the additional tariffs are focused on seven industries: steel and aluminum, semiconductors, electric vehicles, lithium-ion batteries, battery components and critical minerals, solar panels, port cranes, and medical products. The tariffs have been raised to between 25% and 100%.

The decision to increase tariffs on Chinese-manufactured products has garnered widespread global attention and sparked intense discussions across various sectors. From the U.S. perspective, on one hand, this move is indeed aimed at protecting domestic strategic industries. The U.S. has been committed to revitalizing its domestic automotive industry, especially in the electric vehicle sector. However, the rapid rise of China's electric vehicle industry has created formidable competition, exerting unprecedented pressure on the United States. On the other hand, with the election year upon us, this move by the U.S. may be a strategy by the Biden administration to secure support from voters in key swing states. After all, voters in these regions are extremely concerned about economic issues, particularly the development of traditional manufacturing industries.

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In the main industries where tariffs are being increased, China's direct exports to the U.S. account for a relatively low proportion, with a smaller impact.

However, in the main industries where tariffs are being increased, China's direct exports to the U.S. account for a relatively low proportion, and the proportion of most products exported to the U.S. has shown a declining trend in recent years. It is expected that the U.S.'s additional tariffs will have a minimal impact on the export of related domestic products.

For example, according to research and calculations by CITIC Securities:

From January to March 2024, the proportion of aluminum and its products, steel, mineral products, vehicles and their spare parts exported to the U.S. in China's corresponding exports of these products was only 10.7%, 0.8%, 1.9%, and 9.2%, respectively, which are relatively low proportions.

Compared to the full year of 2018, the proportion of aluminum and its products, steel, mineral products, vehicles and their spare parts exported to the U.S. in China's corresponding exports of these products for the full year of 2023 decreased by 1.0, 0.3, 1.5, and 14.6 percentage points, respectively;

For the full year of 2023, China's exports of vehicles and their spare parts to the U.S. decreased by 7.3% year-on-year.In the field of semiconductor products, according to data from the China Chamber of Commerce for Import and Export of Machinery and Electronic Products, in 2023, the export of integrated circuits from Mainland China to the United States accounted for only 1.7% of the total;

The United States has a relatively low share in China's solar cell exports, ranking outside the top 10;

According to data from the China Industrial Association of Power Sources, in 2023, Germany, the Netherlands, Spain, and Italy, four EU countries, collectively accounted for 25.3% of China's lithium battery exports, higher than that of the United States (20.8%);

In terms of medical products, in 2023, the share of medical device exports to 64 countries along the "Belt and Road" increased by 4.8 percentage points to 29.1% compared to 2022, already higher than the share occupied by the United States.

Therefore, in the main industries where tariffs are increased, China's direct exports to the United States account for a relatively low proportion. Coupled with the fact that the imposition of tariffs on some products is expected to be fully anticipated over the next three years, the overall impact of the event may be relatively small. Especially compared with the aggressive measures during the Trump era, the impact of this time can be considered insignificant.

Impact on the A-share market

However, despite the relatively small overall impact, the impact on industries and the emotional impact on the capital market still need to be taken seriously. After all, facing a relatively fragile A-share market, any slight change may cause market fluctuations.

For example, for electric vehicles, the U.S. Trade Representative's Office stated that from September 27th, the tariff rate on Chinese-made electric vehicles will be increased to 100%. In August, the European Commission disclosed to relevant parties the draft decision on imposing final countervailing duties on pure electric vehicles imported from China. That is to say, both Europe and the United States are currently considering taxes on domestic electric vehicles, which indeed has a certain impact on the export of domestic electric vehicles and the development of overseas business. Although the export share is not large, the short-term negative impact on the industry still needs to be guarded against.

In addition, the news announced by the United States this time is relatively sudden because, in May, according to the notice issued by the White House, the imposition of taxes on multiple industries will be implemented in stages over the next three years. Now, some tariffs will take effect on September 27th, and the increase in tariffs on other products, including semiconductor chips, will also take effect within the next two years, which seems to be somewhat advanced.

Therefore, from the perspective of time expectation and emotional impact, there is still a certain impact on the industries involved. For A-shares, the impact of tariff collection has always existed. After all, on the basis of having a substantial impact on the industry, the emotional impact is also direct. If there are no other positive factors to offset, at least in the short term, it will bring negative emotional impact to the market.