Biden calls for tripling tariffs on steel industry as election nears

This investigation, which will be launched Wednesday by the office of US Trade Representative Katherine Tai, could lead to the imposition of new customs duties or other sanctions on Chinese ships. The investigation follows a petition filed last month by the United Steelworkers and four other unions.

The actions are just the latest sign of the president’s determination to be seen as a defender of the steel industry, whose workers are spread across states in the industrial Midwest that could decide elections. In March, the president made an unusually blunt comment about a pending corporate acquisition, saying it was “vital” that US Steel remained American-owned.

Nippon Steel, a larger and more profitable Japanese company, has agreed to acquire the famous American steelmaker for $14.9 billion. The deal is being reviewed for potential national security concerns by a committee led by the Treasury Department.

The emergence of industry-specific guarantees should delight the president’s union audience on Wednesday. But that could increase costs for industries that use steel, which employ many more workers.

Biden’s likely opponent this fall, former President Donald Trump, is courting the same voters with his own economic nationalism. The Republican announced he would impose across-the-board 10 percent tariffs on all foreign goods and a 60 percent levy on Chinese imports, a move that many economists said would fuel inflation.

The combination of tariffs and investigations also represents Biden’s strongest steps yet to prevent China from unleashing an avalanche of low-cost goods on global markets at a time of high demand in its economy. national is weak.

Treasury Secretary Janet L. Yellen recently returned from a visit to Beijing, where she warned Chinese officials that the United States would not accept a second “China shock,” a reference to the impact of the rising economic impact of China in the early 2000s on American manufacturers. China’s systematic use of subsidies and other preferences for favored companies has led to overcapacity in traditional sectors like steel and emerging clean energy industries.

“China’s political overcapacity poses a serious risk to the future of the U.S. steel and aluminum industry. China cannot export to recover. China is simply too big to play by its own rules. In manufacturing sectors like steel, China is already producing more than it or the world can easily absorb,” said Lael Brainard, director of the National Economic Council, who briefed reporters on the president’s actions.

China’s steel production is equivalent to about half of global demand for the industrial metal, and its export prices are about 40 percent lower than those charged by U.S. steelmakers, according to the administration.

Yet current Chinese imports represent just 0.6% of total U.S. steel demand, according to a second White House official who spoke behind the scenes, in line with the administration’s ground rules for such calls.

The 25 percent tariffs Biden wants on Chinese steel and aluminum would come after the U.S. Trade Representative concludes his long-running review of existing trade barriers on goods from China.

The administration expects the tariffs to have “no inflationary effect” since they apply to a limited set of products, the official added.

Biden administration officials have been pressuring Mexico for months to deal with a surge in steel and aluminum shipments to the United States. Tai accused Mexico of violating a 2019 agreement that led to the removal of 25% tariffs imposed by Trump in 2018.

U.S. officials have held several rounds of negotiations with their Mexican counterparts, including this week. Mexican authorities have rejected allegations that the shipments violate the vaguely worded agreement.

“The administration is correct that the problem is Chinese overcapacity. The real question is how to get them to eat,” said William Reinsch, a trade specialist at the Center for Strategic and International Studies.