Article Summary –
President Joe Biden has promised to block the acquisition of U.S. Steel by a Japanese company and called for a tripling of tariffs on Chinese steel. He made these statements during a visit to United Steelworkers in Pittsburgh, where he also pledged to push for higher tariffs on Chinese steel and aluminum to protect domestic steelworkers. The current tariff rate is 7.5% for both steel and aluminum, but could increase to 25% under Biden’s proposal, and separate tariffs of 10% on aluminum and 25% on steel would also remain in place.
Biden Promises to Block U.S. Steel Acquisition and Increase Tariffs
President Joe Biden assured steelworkers in Pennsylvania that he would prevent the acquisition of U.S. Steel by Japan’s Nippon Steel and push for a tripling of tariffs on Chinese steel. Biden’s tough stance on trade policy aims to garner working-class votes in the battleground state.
Biden’s announcement escalates the competition with potential Republican contender Donald Trump, who also advocates strict trade policies on China.
At the United Steelworkers’ Pittsburgh headquarters, Biden emphasized that U.S. Steel, a company with over a century-long history, should remain entirely American. He assured the labor union that he would block the sale to keep the company “American-owned, American-operated.”
Biden also proposed increased tariffs on Chinese steel and aluminum to safeguard American steelworkers from cheap imports. The current tariff rate of 7.5% for both commodities could potentially rise to 25% under his proposal. Furthermore, distinct tariffs of 10% on aluminum and 25% on steel would stay in place.
According to the Census Bureau, only 3% of the $6.1 billion steel products imported into the U.S. over the past year came from China. However, Biden administration officials argue that higher tariffs are necessary as preventative measures, citing fears of China increasing its exports.
Biden reaffirmed his commitment to tough policies against China, including prohibiting the export of advanced technologies that could jeopardize national security. He took a jab at Trump for failing to implement such measures despite his hard-line rhetoric on China.
The administration also plans to investigate nations and importers that flood markets with Chinese steel. It’s also collaborating with Mexico to prevent Chinese companies from bypassing tariffs by exporting steel to the U.S. via Mexico.
Biden’s move has been welcomed by U.S. steelmakers. Kevin Dempsey, president of the American Iron and Steel Institute, accused China of disrupting world markets by subsidizing production and dumping products in the U.S. and other markets.
Despite these positive reviews, higher tariffs could have significant economic implications. The cost of steel and aluminum could rise, potentially increasing prices of cars, construction materials, and other essential goods for U.S. consumers. This could further aggravate inflation, already a burden on Biden’s administration.
Meanwhile, the former president, Trump, remains adamant about preventing foreign companies from acquiring U.S. Steel. He imposed broader tariffs on Chinese goods during his tenure and vows to increase levies if he wins another term.
Oxford Economics, a consultancy firm, suggests that implementing the tariffs Trump proposed could potentially harm the U.S. economy.
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