President Biden Calls for Tripling Steel Tariffs on China to Protect American Producers

President Joe Biden announced today his plans to triple tariffs on steel and aluminum imported from China as part of his efforts to protect American producers from an influx of low-cost imports. The announcement was made during a speech to steelworkers in Pennsylvania, a battleground state crucial to the upcoming election.

Intersection of Trade Policy and Voter Appeal

The decision reflects the intersection of Biden's international trade policy with his efforts to appeal to voters in Pennsylvania ahead of the November election. The White House emphasized that the move aims to shield American manufacturing from unfair trade practices rather than solely catering to union audiences.

Expansion of Tariffs on Chinese Imports

President Biden also plans to triple levies on Chinese aluminum, which currently stands at 7.5% for both metals. The administration intends to pursue anti-dumping investigations against countries and importers flooding existing markets with Chinese steel. Additionally, efforts are underway to prevent Chinese companies from circumventing tariffs by shipping steel to Mexico for subsequent export to the U.S.

Protecting American Manufacturing

Lael Brainard, White House National Economic Adviser, stated that the President's decision aligns with the goal of investing in American manufacturing while safeguarding workers from unfair exports associated with China’s industrial overcapacity.

Economic Risks and Competition Concerns

While the decision to increase tariffs aims to protect American industries, higher tariffs could pose economic risks. The potential increase in steel and aluminum prices may impact the costs of various goods, including cars and construction materials, potentially affecting U.S. consumers. The move also echoes the protectionist policies of former President Donald Trump.

Strategic and Balanced Approach

Biden administration officials emphasized that the proposed tariff increase represents a strategic and balanced approach. China's significant steel production, coupled with its below-market pricing, has raised concerns about market distortion and eroding competition.

Global Economic Competition

Biden's announcement comes following the administration's efforts to support a Taiwanese semiconductor company's expansion in Arizona, aimed at enhancing the U.S.'s competitive position in the global semiconductor market. The Treasury Secretary, Janet Yellen, warned against oversaturating the market with low-cost goods and highlighted the impact of inexpensive steel on industries worldwide, including in the United States.