Spiraling protectionism

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More countries join the protectionist wave | The race for critical minerals and supply chains | Successful subsidies | More research from Hinrich Foundation

More countries join the protectionist wave

Bloomberg reports that Brazil is joining the protectionist wave over steel imports, and that Mexico is applying new tariffs on steel and plastic. Mexico will also halt incentives for Chinese EV makers, per Reuters. Rhodium Group looks at EU measures to counter Chinese EV imports and finds there ain’t no duty high enough.

Mentioned publications

1. Brazil Joins Protectionist Wave in Face of Cheap Steel Imports – Mariana Durao and Martha Viotti Beck, Bloomberg, April 24, 2024
   Brazil is imposing a quota system on 11 types of steel alloy products.
2. Mexico Tariffs on Steel, Plastics to Affect 7% of Total Imports – Maya Averbuch and Alex Vasquez, Bloomberg, May 1, 2024 
   President AMLO’s decree places temporary tariffs of 5% to 50% on over 500 kinds of goods.
3. Exclusive: Mexico, facing US pressure, will halt incentives to Chinese EV makers – Diego Ore, Reuters, April 18, 2024
   Mexico may be taking steps to deter Chinese EV investment.
4. Ain’t No Duty High Enough – Gregor Sebastian, Noah Barkin and Agatha Kratz, Rhodium Group, April 29, 2024 
   Unless the EU imposes very high duties on Chinese EV imports, exporting to the EU will remain profitable.

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The race for critical minerals and supply chains

Is the world witnessing a Cold War-era style race for influence and resources when it comes to critical minerals? A three-part Bloomberg series covers the reorientation of supply chains for key metals and critical minerals with a focus on Africa. Access to critical minerals in Africa provides yet another reason why the US must not allow its trade program with Africa to die, according to Zainab Usman in the Financial Times. The US and the Philippines are partnering to develop nickel production, writes Bloomberg. Tweaks to final EV tax credit rules ease the way for US automakers but will anger China hawks, per Politico.

Mentioned publications

1. Bloomberg series “Moving Metals”:
   Part 1: US Bid to Loosen China’s Grip on Key Metals for EVs Is Stalling – Bloomberg, February 20, 2024
   Part 2: Biden’s EV Dreams Are a Nightmare for Tesla and the US Car Industry – Bloomberg, February 21, 2024
   Part 3: US Bets on $2.3 Billion African Railway to Help Deliver EV Revolution – Bloomberg, February 21, 2024 
   Bloomberg produced a three-part report on Western efforts to create an alternative, China-free, global metals supply chain.
2. America should not allow its trade programme with Africa to die – Zainab Usman Op-Ed, Financial Times, February 8, 2024
   AGOA should be reformed to focus US trade relations with Africa more strategically.
3. US, Philippines Eye Agreement to Cut China Nickel Dominance – Bloomberg, May 1, 2024 
   The US is working with the Philippines to develop its nickel mining and processing.
4. Clean Vehicle Credits Under Sections 25E and 30D; Transfer of Credits; Critical Minerals and Battery Components; Foreign Entities of Concern – Federal Register, May 6, 2024
   Biden’s final EV tax credit rules please automakers, anger China hawks – James Bikales, Politico, May 3, 2024
   Final rules on EV tax credits under the IRA allow some leniency in sourcing key critical minerals.
   
   

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Successful subsidies

Will the US, EU, and Japan really ever agree on new conventions for subsidies? Nikkei Asia breaks news about Japan-EU talks on subsidies. Feeling that their backs are against a wall, the EU may return to subsidies, reports the Wall Street Journal. How successful has China’s “Made in China 2025” policy been? The South China Morning Post reports remarkable successes over the past nine years, and also explains why China’s upcoming third plenum could be an important inflection point for Chinese economic policy.

Mentioned publications

1. Japan and EU to unify subsidy rules for EVs, solar panels – Nikkei Asia, April 26, 2024
   Japan, the EU, and the US appear to be discussing unified rules on subsidies, but will they ever materialize?
2. Europe Takes Radical Steps to Boost Production; ‘There Is No Other Option’ - Tom Fairless and Kim Mackreal, The Wall Street Journal, May 2, 202 
   The EU reconsiders subsidies.
3. Made in China 2025: China meets most targets in manufacturing plan, proving US tariffs and sanctions ineffective – South China Morning Post, April 30, 2024
   China has made impressive progress on its ten-year plan, with one year still to go.
4. How China’s third plenums have reshaped its economy – and what to expect this year – South China Morning Post, April 30, 2024
   What can we expect and why is it important?

More related analysis from HF:

• What EVs tell us about global trade's troubles
• Friend-shoring critical mineral supply chains
• Fighting subsidies with subsidies

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