Biden makes trade play for steel workers

As part of an action package aimed at winning the Midwestern voters, President Obama will propose today raising tariffs on Chinese aluminum and steel.

The Biden administration will propose on Wednesday a hike in tariffs on Chinese aluminum and steel as part of an action package aimed at punishing Beijing and winning votes from steelworkers and other industrial workers this November.

In a speech to the United Steelworkers union in Pittsburgh, President Joe Biden will ask that his U.S. trade representative triple tariffs on aluminum and steel imposed by Trump’s administration as a response to China’s subsidies.

When combined with the separate tariffs that former President Donald Trump imposed on metals due to national security concerns, the result could be tariffs of up to 50 percent for Chinese Steel and more than 30 percent for Aluminum. The actual impact of tariffs may be minimal due to a sharp drop in Chinese metal exports to the U.S. following Trump’s duties.


These moves are meant to appeal to blue-collar voters in the Midwest, where Biden is battling for votes in states Trump won in 2016 with his anti-trade message. Biden, who announced earlier this year that he would oppose a Japanese competitor’s takeover of Pittsburgh-based U.S. Steel, aligned himself with the United Steelworkers Union, which opposes the transaction as well and endorsed Biden shortly after.

Biden, despite claiming to be the most union-friendly president in history is still fighting to gain support from union rank and file members. According to a recent NBC News survey, the president’s margin in support among union-household voters has decreased since the 2020 election.

Senior administration officials have confirmed that Biden would reiterate his opposition to U.S. Steel’s deal in his address to the union to bolster support. The president will not only announce tariffs, but also ask USTR to investigate China’s shipbuilding sector, which could lead to new tariffs against Chinese ships. He will also instruct his administration to work closely with Mexico to prevent China from evading tariffs through the shipping of steel and aluminum via Mexico. Both actions were requested by the Steelworkers Union.

These actions are intended to protect U.S. employees from Chinese industries that, according to the administration, benefit from unfair subsidies. The state also provides support to China’s economy to help boost its exports. Officials from the administration told reporters on Tuesday that these policies could undermine U.S. steel and other industries.

Lael Brainard of Biden’s National Economic Council told reporters that China is already producing more steel than the world or China can absorb. “China’s subsidies, and other forms support lead to exports flooding the global market at artificially low price, undercutting American cleaner steel.”

Biden’s request for tariffs will technically ask USTR to triple the tariffs that were imposed in response to China’s industrial subsides — from 7.5 to 22.5 percent. This is part of their ongoing review of Trump’s tariffs intended to counter China’s discriminatory practices. These duties would be in addition to the national security tariffs that are still in place — 25 percent for Chinese steel and 10 per cent for Chinese aluminum.

Officials from the Administration said that the tariff levels were designed to make American manufacturers competitive with their Chinese competitors.

A senior administration official stated that “if you look at the prices, China’s steel export prices are 40% lower than U.S. prices.” “Therefore it is important that these new duties — if implemented — create a level playing field in order to counter China’s unfair practices on aluminum and steel.”

They also stated that they did not anticipate the move would increase inflation, since Chinese imports account for just 0.6 percent U.S. consumption of steel.

Biden’s move to impose tariffs is technically a request for USTR. However, the outcome is already all but predetermined. The U.S. trade representative’s office is reviewing the Trump-era Tariffs since over a year. They would need to present the results to the White House to act. U.S. Trade Representative Katherine Tai said on Tuesday to lawmakers that the review should be complete “soon”, but refused to provide more details.