On Sept. 13, 2024, following the conclusion of the U.S. trade representative’s (USTR) statutory review of Section 301 tariffs, the Biden administration announced final increases on tariffs on certain Chinese-origin goods. These tariff increases will affect duties on imports from China across strategic manufacturing sectors including electric vehicles, batteries, solar cells, semiconductors, medical products, minerals and materials including steel and aluminum.
Section 301 tariffs will increase for specific imports, to between 25% to 100% beginning Sept. 27, 2024, with other rates scheduled to increase in 2025 and 2026 for Chinese-origin semiconductors, medical products, lithium-ion non-electrical vehicle batteries, permanent magnets and natural graphite.
Changes in the Final Tariffs
Following its original proposal to increase tariffs on Chinese-origin goods in May 2024, USTR received over 1,100 comments during the public comment period. The tariff increases proposed in May were largely adopted, with exclusions for “ship-to-shore” cranes and enteral syringes.
Below is a summary of some of the tariff increases:
| Product | Change in Final Rate |
|---|---|
| Battery parts (non-lithium-ion batteries) | Increase rate to 25% in 2024 |
| Electric vehicles | Increase rate to 100% in 2024 |
| Personal protective equipment | Increase rate to 25% in 2024 |
| Lithium-ion electric vehicle batteries | Increase rate to 25% in 2024 |
| Lithium-ion non-electric vehicle batteries | Increase rate to 25% in 2026 |
| Medical gloves | Increase rate to 50% in 2025 and 100% in 2026 |
| Natural graphite | Increase rate to 25% in 2026 |
| Other critical minerals | Increase rate to 25% in 2024 |
| Permanent magnets | Increase rate to 25% in 2026 |
| Semiconductors | Increase rate to 50% in 2025 |
| Ship-to-shore cranes | Increase rate to 25% in 2024 (with certain exclusions) |
| Solar cells (whether or not assembled into modules) | Increase rate to 50% in 2024 |
| Steel and aluminum products | Increase rate to 25% in 2024 |
| Syringes and needles | Increase rate to 100% in 2024 (with certain exclusions) |
The final tariffs and their respective date of enforcement are listed below:
Rate Increases Effective in 2024
| Product | Current Rate | New Rate |
|---|---|---|
| Battery parts (non-lithium-ion batteries) | 7.5% | 25% |
| Electric vehicles | 25% | 100% |
| Lithium-ion electrical vehicle batteries | 7.5% | 25% |
| Personal protective equipment, including respirators and facemasks (first increase) | 7.5% | 25% |
| Syringes and needles (excluding enteral syringes) | 0% | 100% |
| Ship-to-shore cranes | 0% | 25% |
| Solar cells (whether or not assembled into modules) | 25% | 50% |
| Steel and aluminum products | 0% -7.5% | 25% |
| Various critical minerals | 0% | 25% |
*Tariff increases effective in 2024 apply to products imported on or after Sept. 27, 2024.
Rate Increases Effective in 2025
| Product | Current Rate | New Rate |
|---|---|---|
| Semiconductors | 25% | 50% |
| Rubber medical and surgical gloves (first increase) | 7.5% | 50% |
| Disposable textile facemasks (first increase) | 7.5% | 25% |
*Tariff increases effective in 2025 apply to products imported on or after Jan. 1, 2025.
Rate Increases Effective in 2026
| Product | Current Rate | New Rate |
|---|---|---|
| Disposable textile facemasks (second increase) | 25% | 50% |
| Surgical and non-surgical respirators and facemasks (second increase) | 25% | 50% |
| Enteral syringes (exempted in 2024 and 2025) | 0% | 100% |
| Lithium-ion non-electrical vehicle batteries | 7.5% | 25% |
| Rubber medical and surgical gloves (second increase) | 50% | 100% |
| Natural graphite | 0% | 25% |
| Permanent magnets | 0% | 25% |
*Tariff increases effective in 2026 apply to products imported on or after Jan. 1, 2026.
The final tariff increases will significantly impact the price of goods imported from China. U.S. policymakers have also anticipated that once the tariffs are in place, the Chinese government will retaliate through new or increased tariffs on U.S. products. It remains important for companies to assess the extent to which the final tariffs will impact their operations as well as future developmental activities and the extent to which any existing or proposed development activities may benefit from any announced exclusion process.
All stakeholders in the energy space will need to assess the impact of the final tariffs under existing procurement, construction and other related development contracts and consider how to address these tariffs and exclusions in any contracts yet to be executed.
McGuireWoods continues to track the proposed tariff increases and the market response. Please reach out to the authors with questions or to discuss the above information, including strategies to address and allocate the risks associated with the proposed tariff increases.