US-China tariffs: Anti-dumping probes can cut both ways

Last week Team Biden announced it was tripling US tariffs on Chinese EV batteries and quadrupling them on Chinese EVs. Beijing has responded with a review of Chinese tariffs on polyoxymethylene copolymer. Three points to note: first, it’s only a review. China isn’t imposing a tit-for-tat tariff – yet. It’s given itself a year to think about it. Second, polyoxymethylene copolymer is a specialised plastic used in cars and electronics, chosen by Xi because the list of items China can tax on entry in a way that hurts the West without hurting itself is surprisingly short. Third, those US tariffs show Biden is determined a) to make sure the US energy transition is made in America, and b) not to be outdone by Trump in protectionism as long as he can call it something else (like inshoring or friendshoring). And there’s a fourth point: Xi may want to flood Europe with cheap BYD cars, but he doesn’t want a trade war.