Biden pushes for increased tariffs on Chinese steel to win over union voters

President Joe Biden is set to propose a significant increase in tariffs on Chinese steel, aiming to triple the current rates to protect U.S. steelmakers from the surge of cheaper imports. This policy announcement was scheduled during his speech to steelworkers in Pennsylvania, a key battleground state for the upcoming November elections.

While the administration asserts that the tariff hike is to defend American jobs and industries from global unfair trade practices, it also aligns with Biden’s strategy to engage voters in crucial states.

Besides steel, the proposed measures include a similar increase in tariffs on Chinese aluminum, currently at 7.5%. Moreover, the administration plans to launch anti-dumping probes to check the influx of cheap Chinese steel and collaborate with Mexico to prevent Chinese firms from bypassing these new tariffs by routing their products through other countries before entering the U.S.

“The president is deeply committed to American manufacturing and protecting it from China’s excessive industrial capacity,” stated Lael Brainard, White House National Economic Adviser, during a press briefing.

Biden’s announcement is part of a three-day tour in Pennsylvania, starting in Scranton, moving through Pittsburgh at the United Steelworkers union headquarters, and ending in Philadelphia.

The administration highlighted the distortive effects of China’s market practices on global steel and aluminum industries, emphasizing the need for strategic measures to counteract these challenges without harming the U.S. economy. Such tariff increases, however, might lead to higher domestic prices for steel and aluminum, potentially impacting various sectors including automotive and construction, and possibly exacerbating inflationary pressures already present in the economy.

This move by Biden mirrors some aspects of the trade policies of Donald Trump, who had previously implemented broad tariffs on Chinese goods to leverage better trade terms. Trump has criticized Biden’s approach and suggested he would intensify such trade barriers if re-elected.

Officials from the Biden administration are positioning these tariff adjustments as a “strategic and balanced” response, differentiating their approach from the previous administration by emphasizing the need for careful consideration of the broader economic impacts.

Additionally, this announcement follows Biden’s support for significant investments in domestic semiconductor production, aiming to enhance U.S. competitiveness against Chinese manufacturers.

This move has international implications as well, with Treasury Secretary Janet Yellen recently discussing the global repercussions of cheap Chinese steel during her visit to China, where she faced concerns about U.S. trade policies.

The potential acquisition of U.S. Steel by Japan’s Nippon Steel, which Biden opposes, adds another layer to the complex dynamics of international trade and industry competitiveness, highlighting the administration’s focus on maintaining American ownership of key industrial assets.