SCRANTON, Pa. (AP) — President Joe Biden is calling for a tripling of tariffs on Chinese steel and aluminum to protect American producers from a flood of cheap imports, and will pitch his election-year plan during a visit Wednesday with steelworkers in Pennsylvania, where union support could prove crucial in the White House race.
The move reflects the intersection of Biden’s international trade policy with his reelection effort. The White House insists the policy is more about shielding American manufacturing from unfair trade practices overseas than firing up a union audience.
The current tariff rate is 7.5% for both steel and aluminum but could climb to 22.5%.
The Biden administration also promised to pursue antidumping investigations against countries and importers that try to saturate existing markets with Chinese steel. It said it was working with Mexico to ensure that Chinese companies cannot circumvent the tariffs by shipping steel there for subsequent export to the United States
“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,” White House national economic adviser Lael Brainard told reporters.
During a visit to United Steelworkers union headquarters in Pittsburgh, Biden will announce that he is asking the U.S. Trade Representative to raise tariffs. The Democratic president is on a three-day Pennsylvania swing that began in his childhood hometown of Scranton on Tuesday and will include a visit to Philadelphia on Thursday.
In a brief exchange with reporters before leaving Scranton, Biden was asked about the escalating trade tensions with China and he responded, “No trade war.” Later, at Scranton’s war memorial, Biden crouched down and ran his fingers along the name of one of the fallen — uncle Ambrose J. Finnegan Jr., who died in World War II.
The announcement on steel tariffs was cheered by the U.S. steelmakers. Kevin Dempsey, president of the American Iron and Steel Institute, accused China of disrupting “world markets both by subsidizing the production of steel and other products and by dumping those products in the U.S. and other markets.”
The move is largely symbolic.
The U.S. imported roughly $6.1 billion in steel products in the 12 months ending in February 2023, but just 3% of those imports came from China, according to Census Bureau figures. Citing already existing trade barriers, the American Iron and Steel Institute said China last year accounted for just 2.1% of U.S. steel imports, making it America’s seventh-biggest source of foreign steel.
To coincide with the announcement, Biden’s campaign released a 60-second ad that will air on Pennsylvania television for the next five days. It features a steelworker, who is also a small-town mayor, praising the president’s economic policies.
Meanwhile, U.S. Trade Representative Katherine Tai announced that her office, acting on a petition from five national labor unions, was investigating China for “targeting the maritime, logistics and shipbuilding sectors for dominance.”
“The allegations reflect what we have already seen across other sectors,” Tai said in a statement.
The administration has accused China of more broadly distorting markets and eroding competition by unfairly flooding the market with below-market-cost steel.
”China’s policy-driven overcapacity poses a serious risk to the future of the American steel and aluminum industry,” Brainard said. Referencing China’s economic downturn, she added that Beijing “cannot export its way to recovery.”
Higher tariffs can carry major economic risks, though. Steel and aluminum could become more expensive, possibly increasing the costs of cars, construction materials and other key goods for U.S. consumers.
Inflation has already been a drag on Biden’s political fortunes, and his turn toward protectionism echoes the playbook of his predecessor and opponent in this fall’s election, Republican Donald Trump.
The former president imposed broader tariffs on Chinese goods during his administration and has threatened to increase levies on Chinese goods unless they trade on his preferred terms as he campaigns for a second term. An outside analysis by the consultancy Oxford Economics has suggested that putting in place the tariffs Trump has proposed could hurt the overall U.S. economy.
China produces about half of the world’s steel and is making far more than its domestic market needs. It sells steel on the world market for less than half what U.S.-produced steel costs, administration officials said.
The first step to the higher tariffs is the completion of a review of Chinese trade practices. Once Biden gives the official authorization, there will be a public notice and a comment period.
Treasury Secretary Janet Yellen, during a recent visit to China, warned against oversaturating the market with cheap goods, and said low-cost steel had “decimated industries across the world and in the United States.” The Chinese expressed grave concern over American trade and economic measures that restrict China, according to China’s official news agency. U.S. Secretary of State Anthony Blinken also has an upcoming visit to China.
Also potentially shaking up the steel industry is Japanese Nippon Steel’s proposed acquisition of Pittsburgh-based U.S. Steel. Biden said last month that he opposed the move.
“U.S. Steel has been an iconic American steel company for more than a century, and it is vital for it to remain an American steel company that is domestically owned and operated,” Biden said then.
At a rally last weekend in Pennsylvania, Trump said he would not let the deal go through.
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Weissert reported from Washington. Associated Press writer Josh Boak in Washington contributed to this report.
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