Biden seeks higher tariffs on Chinese steel to appeal to union voters

U.S. President Joe Biden has called for triple tariffs on Chinese steel to protect U.S. producers from a flood of cheap imports, an announcement he plans to make in a speech to steelworkers in the battleground state of Pennsylvania on Wednesday.

The move reflects the intersection of Biden’s international trade policies and his efforts to attract voters in a state that could play a key role in deciding the November election.

The White House insists, however, that this is more about protecting U.S. manufacturing from unfair trade practices overseas than angering union audiences.

In addition to raising steel tariffs, Biden will also seek to triple Chinese aluminum tariffs. The current tax rate for both metals is 7.5%. The U.S. government has also pledged to launch anti-dumping investigations into countries and importers that try to capture existing markets with Chinese steel, and said it is working with Mexico to ensure that Chinese companies cannot circumvent tariffs by shipping steel to Mexico for subsequent export to other countries.USA

White House national economic adviser Lael Brainard said in an interview with reporters: “The president understands that we have to invest in American manufacturing. But we also have to protect those investments and workers from unfair exports associated with Chinese industrial overcapacity. ”

Biden will announce during a visit to the United Steelworkers headquarters in Pittsburgh that he is asking the U.S. Trade Representative to consider tripling tariffs. The president will begin a three-day trip to Pennsylvania on Tuesday in Scranton and will visit Philadelphia on Thursday.

The U.S. government says China distorts the market and lessens competition by unfairly flooding the market with steel at below market cost.

“China’s policy-driven overcapacity poses serious risks to the future of the U.S. steel and aluminum industries,” Brainard said. Referring to China’s economic downturn, she added that Beijing “cannot recover through exports.”

“China is too big to play by its own rules,” Brainard said.

Higher tariffs could pose significant economic risks. Steel and aluminum are likely to become more expensive, potentially increasing the cost of cars, building materials and other key commodities for U.S. consumers.

Inflation has weighed on Biden’s political fortunes, and his shift toward protectionism echoes the strategy of his predecessor and opponent in this fall’s election, Donald Trump.

The former president imposed broader tariffs on Chinese goods during his administration and threatened to increase tariffs on Chinese goods unless they were traded on terms he preferred during his re-election campaign. External analysis from consulting firm Oxford Economics suggests that implementing Trump’s proposed tariffs could harm the overall U.S. economy.

Senior Biden administration officials said they are seeking a “strategic and balanced” approach to new tariff rates, unlike the Trump administration. China produces about half of the world’s steel and already produces far more than its domestic market needs. Officials say the company sells steel on world markets for less than half the cost of producing steel in the United States.

Biden’s announcement comes as his administration works to provide up to $6.6 billion in funding so a Taiwanese semiconductor giant can expand a facility it’s already building in Arizona and better secure the production of the world’s most advanced microchips. Produced in the USA. This move may be seen as effective. Better compete with Chinese chipmakers.

U.S. Treasury Secretary Janet Yellen warned against oversaturating the market with cheap goods during a recent trip to China, saying low-cost steel had “destroyed industry around the world and in the United States.” The Chinese, for their part, have expressed serious concerns about U.S. measures to restrict China’s trade and economy, according to China’s official news agency. US Secretary of State Antony Blinken is also about to visit China.

Japan’s Nippon Steel Corp.’s proposed acquisition of Pittsburgh-based U.S. Steel Corp. could also shake up the steel industry. Biden said last month he opposed the move.

“U.S. Steel has been an iconic American steel company for more than a century, and it is critical that we remain a domestically owned and operated U.S. steel company,” Biden said at the time.

At a rally in Pennsylvania over the weekend, Trump lashed out at Biden over Nippon Steel’s efforts to acquire U.S. Steel Corp., ignoring the president’s opposition to the merger.

“I’m not going to let this deal go through,” Trump said.