President Joe Biden made a promise to unionized steelworkers during a recent visit to the headquarters of the United Steelworkers. He assured the workers that his administration would block the acquisition of U.S. Steel by a Japanese company. In addition, he called for tripled tariffs on Chinese steel as a way to win over working-class votes in Pennsylvania, a key battleground state in the upcoming election.
According to Biden, U.S. Steel has been an iconic American company for over a century and it should remain American-owned. He emphasized the importance of American union steelworkers, calling them the best in the world. The proposed acquisition of U.S. Steel by Japan’s Nippon Steel is currently under review by the Biden administration, and the president has already expressed his opposition to the deal.
While speaking to a pro-union audience, Biden went further and promised to block the acquisition entirely. He stated that the backbone of America has a steel spine, highlighting the significance of the steel industry to the nation. In an effort to protect domestic steelworkers, Biden also announced his intention to push for higher tariffs on Chinese steel and aluminum. The goal is to shield American producers from the influx of cheap imports.
These moves by the president reflect the intersection of his international trade policy with his reelection campaign. The White House, however, insists that the focus is on protecting American manufacturing from unfair trade practices rather than garnering support from union voters.
Currently, the tariff rate for both steel and aluminum is 7.5%. Under Biden’s proposal, the rate could increase to 22.5%. To make this happen, the president is asking his trade representative to seek the increase. Unsurprisingly, the Chinese Embassy in Washington expressed its opposition to these increased tariffs, labeling them as unilateralism and protectionism.
Biden defended his tougher stance on China, citing national security concerns. He mentioned that advanced technologies developed by the U.S. should not be sent to China, as they could potentially be used for the wrong reasons. The administration plans to investigate countries and importers that try to saturate existing markets with Chinese steel. They are also collaborating with Mexico to prevent Chinese companies from circumventing the tariffs by shipping steel there for subsequent export to the United States.
White House national economic adviser Lael Brainard highlighted the need to invest in American manufacturing while protecting workers from unfair exports associated with China’s industrial overcapacity. U.S. Trade Representative Katherine Tai announced that China is under investigation for targeting certain sectors for dominance.
China currently produces around half of the world’s steel and sells it on the global market for significantly lower prices than U.S.-produced steel. The proposed higher tariffs are awaiting completion of a review of Chinese trade practices. Once authorized by Biden, there will be a public notice and a comment period. The process could take several weeks.
The proposed acquisition of U.S. Steel by a foreign company has seen opposition even before Biden’s speech. One steelworker, upon welcoming Biden, urged him to keep U.S. Steel in America, to which Biden responded with a guarantee.
Biden’s Pennsylvania swing, which began in his childhood hometown of Scranton and will include a visit to Philadelphia, is aimed at winning over union members for the upcoming election. His announcement on steel tariffs was met with applause from U.S. steelmakers. Kevin Dempsey, president of the American Iron and Steel Institute, accused China of disrupting world markets by subsidizing the production of steel and other products and dumping them in the U.S. and other markets.
The tariff move, however, is largely symbolic. China accounted for just 2.1% of U.S. steel imports last year, making it the seventh-largest source of foreign steel for the country. While the higher tariffs could carry economic risks and potentially increase costs for consumers, Biden’s focus remains on protecting the American manufacturing industry.
To coincide with the announcement, Biden’s campaign released a television ad featuring a steelworker who is also a small-town mayor. The ad praises the president’s economic policies.
As we analyze the implications of Biden’s trade policies and his focus on protecting American manufacturing industries, we can draw connections to current events and emerging trends. The push for higher tariffs on Chinese steel reflects a broader sentiment of protecting domestic industries and addressing unfair trade practices. This is not unique to Biden’s administration, as former President Donald Trump also imposed tariffs on Chinese goods during his tenure.
However, higher tariffs can come with significant economic risks. The increased costs of steel and aluminum could potentially impact various industries, such as automotive and construction, leading to higher prices for consumers. It is important to balance the protection of domestic industries with the potential consequences of increased tariffs.
Another aspect to consider is the impact on international relations. China has already expressed its opposition to the increased tariffs, calling them a mistake rooted in unilateralism and protectionism. Navigating the delicate relationship with China while protecting American interests presents a complex challenge for the Biden administration.
Looking ahead, it is crucial to monitor the outcome of the review of Chinese trade practices and the potential impact of increased tariffs. Will these measures succeed in protecting domestic industries and leveling the playing field? Or could they lead to unintended consequences, such as trade retaliation or an escalation of tensions between the United States and China?
Furthermore, it is worth considering the long-term implications of these trade policies. Will they encourage domestic manufacturing and create job opportunities, as Biden intends? Or could they potentially hinder economic growth and innovation by limiting access to affordable global resources?
In conclusion, Biden’s promises to block the acquisition of U.S. Steel by a foreign company and push for higher tariffs on Chinese steel highlight his administration’s focus on protecting American manufacturing industries. These policies aim to address unfair trade practices and secure domestic industries, while also appealing to union voters. However, the potential economic risks and diplomatic challenges associated with higher tariffs should be carefully considered. The outcome of these trade policies, as well as their long-term implications, will significantly shape the future of American industries and international relations.