SCRANTON, Pa. (AP) — President Joe Biden is calling for a tripling of tariffs on steel from China to protect U.S. producers from a flood of cheap imports, an announcement he moved to roll out Wednesday in a speech to steelworkers in the battleground states of Pennsylvania.
The move reflects the intersection between Biden’s international trade policies and his efforts to court voters in a state that will likely play a crucial role in determining the November election.
The White House, however, insists the policy is more about protecting U.S. manufacturing from unfair trade practices abroad than encouraging a union drive.
In addition to raising steel tariffs, Biden will also seek to triple tariffs on Chinese aluminum. The current rate is 7.5% for both metals.
The administration also pledged to launch anti-dumping investigations against countries and importers that try to saturate existing markets with Chinese steel and said it is working with Mexico to ensure that Chinese companies cannot avoid tariffs by shipping steel there for subsequent exports to The United States.
“The president understands that we need to invest in American manufacturing. But we must also protect those investments and those workers from unfair exports linked to China’s industrial overcapacity,” White House national economic adviser Lael Brainard said on a call with reporters.
Biden was expected to announce during a visit to the United Steelworkers union headquarters in Pittsburgh that he is asking the U.S. Trade Representative to consider tripling tariffs. The president is in the middle of a three-day Pennsylvania swing that began Tuesday in Scranton and will include a visit to Philadelphia on Thursday.
Biden was born in Scranton and has made frequent return visits, including a lengthy visit to his parents’ home on Tuesday. Before leaving for Pittsburgh, he also stopped by Zummo’s Cafe on Wednesday morning with the city’s mayor, Paige Cognetti, joking about the scones on offer and shaking hands with customers.
When someone welcomed him back to town, Biden responded, “It’s good to be back in Scranton.”
His administration’s announcement on steel tariffs, meanwhile, was welcomed by U.S. steel producers even before Biden’s speech in Pittsburgh. Kevin Dempsey, president of the American Iron and Steel Institute, accused China of “disrupting global markets, both by subsidizing the production of steel and other products and by dumping those products into the U.S. and other markets.”
Still, the move is largely symbolic. The United States imported about $6.1 billion worth of steel products in the 12 months ending in February 2023 — but only 3% of those imports came from China, according to Census Bureau figures.
In addition, U.S. Trade Representative Katherine Tai announced Wednesday that her office, following a petition from five national labor unions, was launching an investigation into China “with the aim of dominating the maritime, logistics and shipbuilding industries.”
“The allegations reflect what we have already seen in other sectors,” Tai said in a statement, noting that China often uses “a wide range of non-market policies and practices to undermine fair competition and dominate the market, both in China and worldwide. ”
The government has accused China of distorting broader markets and eroding competition by unfairly flooding the market with below-market steel.
“China’s policy-driven overcapacity poses a serious risk to the future of the U.S. steel and aluminum industries,” Brainard said. Referring to China’s economic downturn, she added that Beijing “cannot export its path to recovery.”
“China is simply too big to play by its own rules,” Brainard said.
Higher rates could entail major economic risks. Steel and aluminum could become more expensive, potentially raising the cost of cars, building materials and other key goods for American consumers.
Inflation has already dented Biden’s political fortunes, and his turn to protectionism echoes the playbook 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 has threatened to increase duties 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 the implementation of the tariffs Trump has proposed could hurt the overall US economy.
Senior Biden administration officials said that, unlike the Trump administration, they were seeking a “strategic and balanced” approach to new tariffs. China produces about half of the world’s steel and already produces far more than the domestic market needs. It sells steel on the global market for less than half what U.S.-produced steel costs, officials said.
Biden’s announcement follows his administration’s efforts to provide up to $6.6 billion so a Taiwanese semiconductor giant can expand the facilities it is already building in Arizona and better ensure that the most advanced microchips in the world are produced in the US. compete better with Chinese chip manufacturers.
Treasury Secretary Janet Yellen warned against oversaturating the market with cheap goods during a recent visit to China, saying cheap steel had “decimated industries around the world and in the United States.” According to China’s official news agency, the Chinese in turn expressed serious concerns about US trade and economic measures restricting China. US Secretary of State Anthony Blinken is also visiting China.
The proposed takeover of Pittsburgh-based US Steel by Japan’s Nippon Steel could also shake up the steel industry. Biden said last month he opposed the move.
“US Steel has been an iconic American steel company for more than a century, and it is critical that it remains a domestically owned and operated American steel company,” Biden said at the time.
At a rally last weekend in Pennsylvania, Trump attacked Biden over Nippon Steel’s efforts to buy US Steel, ignoring the president’s objections to the merger.
“I wouldn’t let that deal go through,” Trump said.
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Weissert reported from Washington. Associated Press writer Josh Bock in Washington contributed to this report.
