Biden takes action against China’s unfair practices to protect US steel and shipbuilding industries

The White House announced actions President Biden would be taking against China to help protect the U.S. steel and shipbuilding industries.

On Wednesday, Biden called on the U.S. Trade Representative (USTR), which monitors the compliance of foreign governments to comply with trade agreements, to triple the tariff rate on Chinese steel and aluminum imports. He also called on USTR to investigate China’s unfair shipbuilding practices.

"The Biden-Harris Administration recognizes growing concerns that unfair Chinese trade practices, including flooding the market with below-market-cost steel, are distorting the global shipbuilding market and eroding competition," the White House said.

It added: "These concerns were outlined in a petition to the U.S. Trade Representative from five labor unions requesting an investigation into Chinese acts, policies, and practices in the maritime, logistics, and shipbuilding sectors."

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In the statement, the White House emphasized the importance of American-made steel, saying it remains "critical for our economic and national security."

"Steel is a critical input for our domestic shipbuilding industry — from the commercial shipping vessels that carry American products, to the U.S. naval vessels that keep global seas safe. Commercial shipyards provide industrial capacity for maintaining the U.S. Navy’s dominance and support thousands of suppliers and jobs," the White House statement reads.

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"President Biden’s strategic trade and investment agenda protects workers, consumers, and businesses from unfair competition," it continued. "At the same time, American workers in the steel and aluminum industries face a significant challenge from Chinese exports of steel and aluminum, which are among the most emissions-intensive products in the world. China’s overcapacity and non-market investments in the steel and aluminum industries mean high-quality U.S. products have to compete with artificially low-priced alternatives produced with higher carbon emissions."

Among the new actions the Biden administration is taking to support American steel manufacturing and shipbuilding include calling on the USTR to triple the existing tariff under Section 301 of the Trade Act.

The current average tariff on Chinese imports under Section 301, on certain steel and aluminum products, is 7.5%.

"Chinese policies and subsidies for their domestic steel and aluminum industries means high-quality U.S. products are undercut by artificially low-priced Chinese alternatives produced with higher emissions. To the extent consistent with the United States Trade Representative’s (USTR) review of Section 301 tariffs and findings of her investigation, President Biden is calling for USTR to consider enhancing the effectiveness of tariffs on Chinese steel and aluminum products by tripling them," the White House said.

To get around these increased tariffs, China trades its products with Mexico, which then imports them into the U.S.

"This is a growing challenge that must be addressed to prevent Chinese and others’ steel exports from gaining access to the U.S. market and evading Section 232 or Section 301 tariffs. President Biden recently sent senior members of his administration to Mexico to address this issue," the White House said.

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In addition to steel and aluminum, the USTR is also initiating an investigation into China’s unfair trade practices in the shipbuilding, maritime and logistics sectors.

Biden also announced the construction of six clean iron and steel projects in Pennsylvania, Ohio, and the South and Midwest, to help the U.S. steel industry remain competitive.

These include a $75 million high-silicon grain oriented electrical steel plant in Lyndora, Pennsylvania and up to $500 million for the Cleveland-Cliffs plant in Middletown, Ohio.