President Joe Biden is calling for higher tariffs on Chinese steel and aluminum, part of a series of steps to shore up the American steel sector and woo its workers in this year’s election.
In a visit to Pittsburgh on Wednesday, Biden will propose new 25% tariffs on certain Chinese steel and aluminum products as part of an ongoing review, while the US also launches a formal probe into China’s shipbuilding industry. Biden will reiterate that United States Steel Corp., based in Pittsburgh, should remain American-owned.
“The president understands we must invest in American manufacturing, but we also have to protect those investments and those workers from unfair exports associated with China’s industrial overcapacity,” Lael Brainard, director of the National Economic Council, told reporters.
The broadside comes as the administration continues its review of tariffs imposed on China by ex-president Donald Trump, which Biden has largely kept in place.
Biden plans to speak to 200 union members at the headquarters of the United Steelworkers, a trip heaped in symbolism as the union leads opposition to Nippon Steel Corp.’s $14.1 billion acquisition of US Steel.
The president last month ratcheted up his opposition to the deal. Biden will repeat those comments Wednesday, saying it is “vital” for US Steel “to remain an American steel company that is domestically owned and operated,” according to a White House statement.
The head of the Steelworkers Union, Dave McCall, has opposed the current terms of Nippon Steel’s deal, drawing support from Biden and other political figures.
“I’ll talk to him about the issue we face with Nippon, maybe talk to him about the shipbuilding petition we put in, and thank him for the infrastructure bill and IRA, as we’re starting to get some of that funding for the companies that need it and some of their future employers,” McCall said in an interview Tuesday.
‘Political Statement’
Biden on Wednesday is calling for raising Section 301 tariffs on a wide range of Chinese steel and aluminum — namely, products that currently have 0% or 7.5% tariffs should be each raised to 25%. Rates on products already subject to 25% tariffs wouldn’t change.
The final decision would rest with the US Trade Representative, Katherine Tai, and come after the ongoing review of Section 301 tariffs is concluded, an official familiar with the plans said, speaking to reporters on condition of anonymity. The administration hopes to see the results soon, the official said.
The increase of metal tariffs on China comes as imports from the nation for years have been uneconomic for domestic buyers. The combination of current tariffs under Section 301, Trump-era tariffs under Section 232 and other existing anti-dumping and countervailing duties effectively eliminated Chinese imports of steel and aluminum.
“There is effectively no market impact – this is a political statement,” said Colin Hamilton, managing director of commodities research at BMO Capital Markets Ltd, noting that only 2% of steel and 4% of aluminum imports were from China last year.
Chinese steel imports topped out at nearly 3 million tons in 2014, data from the US Census Bureau show. But the country accounted for just 600,000 metric tons of steel imports in 2023, for a value of $900 million, out of total US steel imports of 25.6 million tons.
US imports of Chinese aluminum totaled 200,000 metric tons worth $750 million, out of total imports of 5.46 million tons.
“Chinese steel has been subject to some very high US anti-dumping and countervailing duties for many years now, and what products continue to flow are largely quite niche high-value items like seamless tubes or packaging steels,” said Matthew Watkins, an analyst at CRU.
“I can’t see an increase in tariffs on China making a significant difference to current US steel import patterns,” Watkins added.
Tai’s office will also launch a formal review of China’s maritime, logistics and shipbuilding sector, a probe that a group of five major union groups sought last month. Biden “believes it is critical to understand China’s uniquely aggressive set of interventions in these sectors,” the White House said in the statement.
Biden will also direct his team to work with Mexico to curb efforts to route Chinese steel into the US through the country. An official familiar with the matter demurred when asked whether Mexican tariffs had been ruled out, saying that instead the administration wants to work with Mexico and reach a joint resolution.
Wednesday is the second day of Biden’s three-day swing through Pennsylvania, a crucial electoral state that’s home to US Steel and the United Steelworkers. It’s also Biden’s birth state — he visited his childhood home in Scranton on Tuesday after a speech criticizing Trump’s tax policy as benefiting only the rich.
The USW has endorsed Biden, though Trump also has support among the union’s rank and file.
“I appreciate him coming to talk to our members. It’s about secure jobs. Enforcement of trade laws are important, but for them to be important you need real industrial policy that dovetails with it,” McCall said. “It’s not just steel, but tire and rubber, supply chain issues, paper, all the other critical infrastructure stuff we represent around the other various industries.”
