Biden calls for tripling tariffs on Chinese steel and probing Beijing's potentially unfair trade actions in shipbuilding

By Victor Reklaitis

President's latest moves coincide with speech to United Steelworkers, as 2024 White House race ramps up

President Joe Biden's administration rolled out new measures that aim to protect U.S. industries and target China on Wednesday, the same day Biden spoke in Pittsburgh to members of the United Steelworkers union.

The moves include a call from Biden for U.S. Trade Representative Katherine Tai to consider tripling existing tariffs on Chinese steel and aluminum, which the White House said currently stand at 7.5% on average.

Biden said Chinese steelmakers have "unfairly low" prices because Beijing comes in to "subsidize them so heavily."

"They're cheating, and we've seen the damage here in America," he said during his speech at the Pittsburgh headquarters of the United Steelworkers.

Tai also is starting an investigation into potentially unfair trade practices by China's MCHI shipbuilding, maritime and logistics sectors, following a petition on that issue from the steelworkers and four other unions.

In addition, the White House said Biden is directing his administration to work with Mexico to prevent China from evading steel and aluminum tariffs by importing into the U.S. through our southern neighbor.

Biden's moves targeting China and his trip to the battleground state of Pennsylvania come as the 2024 White House race ramps up - and as some polls have indicated that swing-state voters may trust the presumptive Republican nominee, former President Donald Trump, over the Democratic incumbent when it comes to handling the economy. Trump was known for his use of tariffs while in office and has proposed more levies if he defeats Biden in November.

When asked about whether the proposed tariffs are a continuation of Trump's trade wars, a senior Biden administration official said the president's moves are strategic and balanced rather than across-the-board duties.

The official also said steel from China accounts for only about 0.6% of total U.S. steel demand, so a higher tariff wouldn't add to inflation. Financial Times opinion columnist Alan Beattie said on social media that that's "true enough," but for the same reason it "won't help the U.S. steel industry either," so it's "in the territory of pure political symbolism."

Biden and other administration officials on Wednesday also reiterated his opposition to Japan-based Nippon Steel's (JP:5401) proposed $14 billion buyout of U.S. Steel (X). Trump also opposes the deal.

Presidents have the authority to block foreign purchases of U.S. assets on national-security grounds, but they're not supposed to make their decisions until after the Committee on Foreign Investment in the United States comes to an impartial conclusion on a given takeover's national-security implications.

While Biden was interacting Wednesday with United Steelworkers members, one steelworker shouted, "Let's keep U.S. Steel in America!" In response, Biden said: "Guaranteed." In his speech, the president said the iconic Pittsburgh-based company should remain "American-owned" and "American-operated."

The higher tariffs for Chinese steel and aluminum would come if they're found to be warranted in the U.S. trade representative's long-awaited review of Section 301 duties, which are named after a part of the Trade Act of 1974. Tai told House lawmakers on Tuesday that her team is "very close" to concluding that review. Analysts have said the review also could deliver higher tariffs on Chinese electric vehicles.

Now read: One thing Biden and Trump agree on: Keeping this $10,000 Chinese EV out of the U.S.

A top Biden economic adviser, Lael Brainard, told reporters that China's "policy-driven overcapacity poses a serious risk to the future of the American steel and aluminum industry." Brainard is director of Biden's National Economic Council.

"China's subsidies and other forms of support lead to exports flooding global markets at artificially low prices, undercutting American steel that is cleaner," she said.

-Victor Reklaitis

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04-17-24 1516ET

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