Specifically, this decision includes a 100% tax on electric vehicles (EVs), 50% on solar panels, and 25% on steel, aluminum, EV batteries, and primary minerals. The tax increase is expected to take effect from September 27.

In addition, the US will also impose a 50% tariff on Chinese semiconductors from early 2025, which now includes two new types of products - silicon wafers and polysilicon used in solar panels.

The Biden administration also kept in place the tariffs imposed by the Trump administration on Chinese goods ranging from toys and T-shirts to internet routers and industrial machinery at 7.5% to 25%.

China has called the tax hike "bullying" and said it would retaliate, arguing that the success of its EV industry is due to innovation rather than government support.