Biden calls for steep hike to tariff on Chinese steel

President Biden will discuss the steel tariffs during a visit to Pennsylvania. PHOTO: HANNAH BEIER/BLOOMBERG NEWS
President Biden will discuss the steel tariffs during a visit to Pennsylvania. PHOTO: HANNAH BEIER/BLOOMBERG NEWS

Summary

The president wants to increase a key tariff rate on Chinese steel and aluminum products to 25% from 7.5%.

President Biden called for raising tariffs on imports of steel and aluminum from China, beginning what is expected to be a broadside of protectionist steps against Beijing during a presidential election in which trade is a flashpoint.

Biden, who will discuss the steps Wednesday during a visit in swing-state Pennsylvania, is asking his trade officials to more than triple a key tariff rate on Chinese steel and aluminum products to 25% from 7.5%. That higher levy would be in addition to a separate 25% tariff on steel and a 10% duty on aluminum imposed under the Trump administration. A senior administration official said the higher tariffs would only affect 0.6% of U.S. demand for steel.

Biden’s move comes as the administration is studying raising tariffs on a range of Chinese exports to the U.S., including electric vehicles, batteries and solar products. The higher metal levies would go into effect as part of the Biden administration’s decision on how to adjust tariffs that date from former President Donald Trump’s time in the White House, senior Biden administration officials said.

A recent surge in Chinese exports has alarmed the Biden administration, helping resolve internal debates over the economic wisdom of tariffs. Treasury Secretary Janet Yellen, who had previously sought to lower tariffs on Chinese goods, was in China last week castigating officials for threatening American industry with a rush of inexpensive exports.

“In manufacturing sectors like steel, China’s already producing more than China or the world can easily absorb," Lael Brainard, the director of the White House’s National Economic Council, told reporters. “China’s subsidies and other forms of support lead to exports flooding global markets at artificially low prices, undercutting American steel."

China’s response to the backlash has been to decry rising protectionism, arguing their exports are the result of market dynamics.

The trade moves come during a complicated political and diplomatic moment for the White House. Biden is facing off against a Republican opponent who first put into place broad tariffs on Chinese goods and is now campaigning on raising them even more. Biden and Trump are competing for the support of unions who favor protectionist measures.

Biden will discuss the steel tariffs at the Pittsburgh headquarters of the United Steelworkers, a union that represents many workers in the steel industry and that recently endorsed the president for re-election.

At the same time, Biden has sought to stabilize relations with Beijing, and raising tariffs on Chinese goods could eat up the good will the two superpowers have managed to establish after months of careful diplomacy.

Steel imports from China have already fallen significantly under the weight of tariffs. In 2023, 598,000 tons of steel were imported from China, down 8.2% from 2022, according to the U.S. Census Bureau and the American Iron and Steel Institute. By comparison, the U.S. imported 6.9 million tons of steel from Canada and 4.2 million tons from Mexico, the two biggest sources of foreign steel.

The concerns about steel are also spilling over into relations with allies and partners. Among the steps the president called for Wednesday was for Mexico to prevent the flow of Chinese steel into the U.S. through its borders. Some lawmakers and companies are worried that China is selling steel into Mexico, where it is then re-exported into the U.S. without any tariffs.

Biden is also opposing Japanese company Nippon Steel’s effort to buy U.S. Steel, repeating his argument that the industrial icon should remain domestically owned. The president has the ability to block the transaction under national-security powers, though Biden hasn’t committed to actually doing so.

Yellen leads the Committee on Foreign Investment in the U.S., the national-security panel that can recommend the president block mergers. She declined to comment Tuesday on how the panel would view the deal.

“I certainly accept the president’s view, which he has stated, that the company should remain in American hands. He hasn’t said specifically that it is an issue of national security, but one that has to do with the good of the workers and the country," she said during a press conference.

As part of Wednesday’s announcement, the U.S. Trade Representative will also open an investigation into Chinese shipbuilding practices. A group of unions had asked for the administration to study whether the Chinese shipbuilding industry was using unfair practices that harmed U.S. firms and workers.

Ken Thomas contributed to this article.

Write to Andrew Duehren at andrew.duehren@wsj.com and Bob Tita at robert.tita@wsj.com

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