Power Up: Biden locks in tariff hikes
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Sept 16 -By Liz Hampton
U.S. Energy Markets Editor
Hello Power Up readers! It's a busy time in oil markets, with prices tanking last week after OPEC lowered its demand forecasts, knocking the globalBrent crudebenchmark below $70 a barrel. Crude futures are back up by more than a dollar this morning, even as more production comes back online in the U.S. following closures in the Gulf of Mexico due to Hurricane Francine. Brent is trading $1.50 higherat $73.11, while West Texas Intermediate crudefutures are at $70.39, up $1.75.
Today's newsletter, however, is going to look at tariff hikes on Chinese goods that the Biden administration locked in at the end of last week. These are hitting everything from critical minerals to electric vehicles. Let's jump in.
Biden hits Chinese EVs with 100% tariff
Steeper USduties on Chinese imports to hit other industries
The Biden administration last week locked in steep tariffhikes on Chinese imports, hitting everything from electric vehicles to solar cells and steel.
The decision marks the end of an over two-year review of tariffs originally imposed by former PresidentDonald Trump. It left some major duty increases announced by the Biden administration in May unchanged.
Tariffs were in the spotlight last week during the first debate between Trumpand Vice President Kamala Harris. Trump has pledged tariffs on 20% of all imports and up to 60% on Chinese goods, something economists have said could cost middle-income families an additional $3,900 a year.
The tariffs locked in on Friday include a 100% duty on Chinese electric vehicles, a 50% tariff on solar cells and 25% duty on steel, aluminum, EV batteries and key minerals. They willtake effect on Sept. 27.
This all comes as the U.S. has been concerned about China's ability to flood the market with less expensive EVs and other products that are vital to the energy transition.
The Biden administration has aimed to boost investment in clean energy jobs in the U.S. as some manufacturers have said they find it hard to compete against a deluge of cheap imports from China, stoking concerns about that country’s outsized presence in the global market.
Reuters reporter Nichola Groom has done some great reporting around how this is playing out in the solar industry. Check out her work.
Automakers have pleaded for lower tariffs on graphite and other critical minerals that are used in EV battery production. They remain dependent on China for those supplies.
Canada has imposed a 100% duty on Chinese EVs and the EU will hold a vote on Sept. 25 on raising tariffs on EVs from China. It’s looking at a 35.5% tariff on top of a 10% car import duty.
Meanwhile, in Houston, the annual Gastech conference is getting underway this week. Liquefied natural gas will be in the spotlight, as projects in the U.S continue to boom and producers are looking for relief from low prices that have forced them to cut output.
ESSENTIAL READING
Coal output in China jumped 2.8% in August from the year prior amid higher thermal power generation and robust chemical industry demand. The world’s largest coal producer mined 396.55 million metric tons of the fuel during the month.
Italian energy firm Eni is in talks with several funds over the possible sale of a minority stake in Plenitude, its renewable and retail business, Francesca Landini exclusively reported. The sale would mark another step in the company’s strategy of tapping specialized investors to fund its energy transition business.
Some 20% of oil production in the U.S. Gulf of Mexico remained offline over the weekend following Hurricane Francine, regulators said. Roughly 28% of natural gas production was offline. About half of the region’s output was shut-in last week as a precaution and some onshore facilities were impacted.
Peru over the weekend approved financing totaling $1.75 billion for its struggling state oil firm Petroperu as part of a bid to help the company manage its mounting debt and dwindling cash.
Nigeria on Friday announced state-owned oil company NNPC will distribute gasolinefrom the new 650,000 barrels-per-day Dangote Refinery to the local market. This ended a deadlock that had stalled distribution from the $20 billion facility.
We hope you're enjoying the Power Up newsletter. We'd love to hear your thoughts and feedback. You can reach us at: powerup@thomsonreuters.com.
Editing by Marguerita Choy
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