On April 17, the Biden-Harris Administration targeted unfair trade practices from Chinese companies and called to triple the tariff rate on aluminum and steel imports from China. Specifically, they took action against companies flooding the U.S. market with below-market-cost steel, which has significantly impacted American steel manufacturing and shipbuilding industries.
President Joe Biden asked the Office of the United States Trade Representatives (USTR), the agency responsible for developing and promoting American trade policy, to enhance tariff effectiveness by substantially increasing the rate. Under Section 301 of the Trade Act of 1974, tariffs on specific products, like those made of steel and aluminum, average 7.5%.
Emissions Problems with Chinese Steel
The Biden administration says China’s policies that subsidize the country’s aluminum and steel industries mean U.S. products get priced out by artificially low-balled overseas products typically made with more emission-intense production processes—Chinese steel and aluminum products are among the most emissions-intensive in the world.
In a statement, Alliance for American Manufacturing (AAM) President Scott Paul said he was encouraged that the Biden administration moved ahead with an investigation into China’s predatory practices in the shipbuilding industry. Paul was also pleased by President Biden’s call to triple tariff rates on steel imports from China. "Whether it is steel and aluminum or shipbuilding or any other industry, we know China’s government will do whatever it takes to dominate,” Paul said.
Petitions from Big Labor
On March 12, 2024, five national labor unions, including the steelworkers (USW), machinists and aerospace workers (IAM), boilermakers (IBB), electrical workers (IBEW) and maritime trades department (MTD), filed a petition to the USTR to investigate China’s acts, policies, and practices in the maritime, logistics, and shipbuilding sector.
Principal U.S. Trade Advisor Katherine Tai said in a statement, "We have seen [China] create dependencies and vulnerabilities in multiple sectors, like steel, aluminum, solar, batteries, and critical minerals, harming American workers and businesses and creating real risks for our supply chains.”
Additional U.S. Actions Against China
The Department of Commerce has put in place more than 30 duties, dumping and otherwise, on steel products since President Biden was sworn in. The tariffs target steel imports priced below fair market value. The Commerce Department has also initiated more than 25 investigations into Chinese exporters for trade evasion.
An increasing challenge is the import of Chinese goods into Mexico and then across U.S. borders to evade tariffs. President Biden has even deployed White House officials to Mexico to fix the problem.
Prioritizing Clean U.S. Steel
Biden has made clean U.S. steel a priority. For example, as part of recent infrastructure and inflation reduction legislation, some $1.5 billion has been earmarked for more than five clean steel and iron projects as part of a wider effort to limit emissions in energy-hungry industries.
The projects hope to demonstrate innovations that remove most steelmaking emissions and help phase out carbon-heavy production. The efforts could also prop up beleaguered steel communities across the country.
For example, in Pennsylvania, a potential $75 million will go towards the lone high-silicon grain-oriented electrical steel plant in the U.S. Some $500 million will also be used in Ohio for a Cleveland-Cliffs factory that makes clean steel for the automotive industry.
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