While the U.S. once dominated the steel industry, foreign competitors have changed that in recent decades – especially China. Now, President Joe Biden has proposed tripling tariff rates on Chinese steel and aluminum due to “unfair practices” according to the White House.
“The current average tariff on certain steel and aluminum products is 7.5% under Section 301,” said a Wednesday fact sheet. “American workers continue to face unfair competition from Chinese imports of steel and aluminum products, which are among the world’s most emissions-intensive.”
According to Reuters, more than half of all global steel production takes places in China. Overall, the industry is responsible for around 8% of the world’s carbon dioxide emissions. Chinese policies and subsidies for their domestic steel and aluminum industries also create artificially low prices and undercut high-quality U.S. products, the White House explained.
Steel Market Update reported earlier this year that “the American steel market, including the stainless steel market, continues to face serious threats from subsidized and dumped imports resulting from foreign government policies creating an unfair playing field,” and that “it is no secret that China is a major culprit.”
Audacy reported last month that Biden called for an investigation into China’s unfair practices related to the automotive industry. Per the Council on Foreign Relations, the U.S. also concerned about China’s massive Belt and Road initiative – an infrastructure project intended to link East Asia and Europe – and a report from the House Select Committee recently indicated that China is the “ultimate geographical source” for the fentanyl crisis taking lives in the U.S.
A petition from five labor unions was recently submitted to the U.S. Trade Representative requesting an investigation into Chinese policies in maritime, logistics, and shipbuilding sectors, and an investigation is moving forward. This request adds on to 27 investigations into anti-competitive actions by Chinese exporters.
“President Biden believes it is critical to understand China’s uniquely aggressive set of interventions in these sectors, and to take actions that address distortions to the global market for commercial vessels, maritime shipping, and logistics that harm American workers and shipbuilders,” the White House said.
Since steel is critical for the domestic U.S. shipbuilding industry, unfair practices in steel have a ripple effect. These ripples impact not only commercial shipping but the U.S. Navy’s dominance as well as thousands of suppliers and jobs.
Biden is working with other countries to prevent Chinese policies from further impacting the global steel market too.
“President Biden is directing his senior team to work with Mexico to jointly prevent China’s and other countries’ evasion of tariffs on steel and aluminum that is imported from Mexico into the United States,” the White House said. “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.”
Other actions taken by the Biden administration to strengthen U.S. steel include up to $1.5 billion through the Bipartisan Infrastructure Reduction Act for six clean iron and steel projects. According to the administration, these projects should demonstrate that new technologies should eliminate the vast majority of emissions from steelmaking while supporting local economies.
“President Biden knows that steel is the backbone of the American economy, and a bedrock of our national security. American steel fueled the country’s industrialization and helped build the middle class. American-made steel remains critical for our economic and national security,” said the White House.