Biden calls for higher Chinese metal tariffs in battleground state Pennsylvania

Pittsburgh — President Joe Biden on Wednesday called for sharply higher US tariffs on Chinese metal products as part of a package of policies aimed at pleasing steelworkers in the swing state of Pennsylvania, at the risk of angering Beijing.

As he campaigned for re-election in the “Steel City” of Pittsburgh, Biden aides said the US president was proposing raising to 25% the tariffs imposed by his predecessor Donald Trump on certain Chinese steel and aluminium products.

“China’s steel companies don’t need to worry about making a profit,” Biden said as he visited the headquarters of the United Steelworkers union.

The products now being targeted currently face up to a 7.5% levy under a Trump-era policy under section 301 of the US trade law, which Biden launched a review of in 2022. The proposed higher tariff rate would apply to more than $1bn worth of steel and aluminium products, a US official said.

The Biden administration is also pressuring neighbouring Mexico to prohibit China from selling its metal products to the US indirectly from there.

At the same time, it is launching an investigation into Chinese trade practices across the shipbuilding, maritime and logistics sectors, which could lead to more tariffs.

The measures invite blowback from China at a time of already heightened tensions between the world’s two biggest economies.

Trump’s broader imposition of tariffs during his 2017-2021 presidency prompted China’s retaliation with its own levies. The Chinese embassy in Washington did not respond to a request for comment.

“No trade war,” Biden told reporters travelling with him in Pennsylvania. The president spoke even as his trade representative told Congress there was need for “decisive” action to protect electric vehicles from subsidised Chinese competition, and Reuters reported the administration would also restore some solar tariffs.

Pennsylvania is one of a half-a-dozen battleground states likely to decide the November election rematch between Biden and Trump. The economy ranks among voters' top concerns.

Officials said on Wednesday the intervention was “targeted” and should not worsen persistently high inflation.

Key voting bloc

Biden and his Republican opponent have each courted union leaders and blue-collar workers in faded industrial hubs who comprise a significant voting bloc in Pennsylvania, Michigan and Nevada, all of them swing states.

The steelworkers union, which sought the measures Biden is adopting, endorsed him last month.

Biden handed the union another win when he came out last month against a proposed $14.9bn bid by Japan’s Nippon Steel to buy US Steel Corp.

“Let’s keep US Steel in America,” a woman among the steelworkers shouted to Biden during a meet-and-greet. “Guaranteed,” Biden replied.

Both 2024 candidates have sharply departed from the free-trade consensus that once reigned in Washington, capped by China’s joining the World Trade Organisation in 2001.

Trump, who withdrew from the would-be Trans-Pacific Partnership trade deal in 2017, has proposed a 10% tariff on all imports if he returns to office.

China was the seventh-largest exporter of steel to the US in 2023, with shipments of 598,000 net tonnes, down 8.2% from 2022, according to US Census Bureau data compiled by the American Iron and Steel Institute, an industry trade group.

Canada was the top exporter to the US, with 6.9-million tonnes, followed by Mexico, with 4.2-million tonnes.

Domestic steelmakers shipped 89.3-million net tonnes of steel in 2023, according to AISI data.

Any new levies on steel and aluminium would be subject to the approval by Katherine Tai, Biden's appointed trade representative, at the completion of the review of the Trump-era tariffs.

The new levies would come on top of 25% Section 232 national security tariffs also imposed by Trump on steel and aluminium products and product-specific anti-dumping and anti-subsidy duties that often reach into the triple-digit percentages.

US Steel and AISI, the steel trade group, praised Biden’s moves on tariffs. The Can Manufacturers Institute said in a statement that the administration “doesn’t go far enough”.

China’s economy grew by a faster-than-expected 5.3% in the first quarter, data showed on Tuesday, as the country has turned to exports to shore up growth in the face of protracted weakness in the property sector and mounting local government debt. Beijing regards Trump-era tariffs as discriminatory.

Officials said they expected Chinese exports to start flooding global markets, concerns raised by treasury secretary Janet Yellen on a trip to the country last week.

China exported 25.8-million tonnes of steel products in the first quarter, the highest for the period since 2016 and a rise of 30.7% year on year, Chinese customs data showed.

“China cannot export its way to recovery,” Biden’s top economic policymaker, Lael Brainard, told reporters.

Reuters