Biden Vows to Keep U.S. Steel American, Calls for Higher Tariffs on Chinese Imports

President Joe Biden assured unionised steelworkers on Wednesday that his administration would prevent the acquisition of U.S. Steel by a Japanese company and called for a tripling of tariffs on Chinese steel. The move aims to use trade policy to secure working-class votes in Pennsylvania, a crucial state during election years. During his visit to the United Steelworkers union headquarters, Biden emphasised that U.S. Steel should remain "totally American."The proposed acquisition by Japan's Nippon Steel is currently under review by the Biden administration. Last month, the president expressed his opposition to the deal, stressing the importance of keeping the company American-owned and operated. In front of a pro-union audience, Biden went even further, stating that "the backbone of America has a steel spine."In addition to blocking the acquisition, Biden is pushing for higher tariffs on Chinese steel and aluminium to protect domestic steelworkers from cheap imports. The current tariff rate is 7.5% for both steel and aluminium but could increase to 22.5%. The president has asked his trade representative to raise the tariffs accordingly.The administration also pledged to pursue investigations against countries and importers attempting to flood existing markets with Chinese steel. They are working with Mexico to ensure that Chinese companies cannot bypass tariffs by shipping steel there for subsequent export to the United States.White House national economic adviser Lael Brainard explained that while investing in American manufacturing is essential, it is also crucial to protect those investments and workers from unfair exports associated with China's industrial overcapacity.Despite concerns about escalating trade tensions with China, Biden insisted there would be "no trade war." The announcement on steel tariffs was welcomed by U.S. steelmakers, who accused China of disrupting world markets through subsidies and dumping products in the U.S. and other markets.However, the tariff move is largely symbolic as only 3% of U.S. steel imports come from China, according to Census Bureau figures. The American Iron and Steel Institute reported that China accounted for just 2.1% of U.S. steel imports last year, making it America's seventh-largest source of foreign steel.Higher tariffs can also carry significant economic risks, potentially increasing the costs of cars, construction materials, and other essential goods for U.S. consumers. Inflation has already impacted Biden's political fortunes, and his turn toward protectionism mirrors the strategy of his predecessor and opponent in this fall's election, Republican Donald Trump.An external analysis by consultancy Oxford Economics suggested that implementing the tariffs Trump proposed could harm the overall U.S. economy.