Trade Cases

USTR targets China in new 301 probe; Biden calls for higher tariffs

Written by Laura Miller

The Biden administration on Wednesday announced measures to support the domestic steel industry.

The office of the US Trade Representative (USTR) announced the launch of a Section 301 investigation into China’s practices in the shipbuilding, maritime, and logistics sectors.

At the same time, President Biden urged a tripling of existing tariffs on imports of Chinese steel and aluminum.

USTR Section 301 probe

The USTR’s investigation comes after the United Steelworkers (USW) and four other national labor unions filed a Section 301 petition last month. The other unions include the International Association of Machinists and Aerospace Workers, the International Brotherhood of Boilermakers, the International Brotherhood of Electrical Workers, and the AFL-CIO’s Maritime Trades Department.

“The petition presents serious and concerning allegations of [China’s] longstanding efforts to dominate the maritime, logistics, and shipbuilding sectors, cataloging [China’s] use of unfair, non-market policies and practices to achieve those goals,” USTR Katherine Tai said on Wednesday.

“I pledge to undertake a full and thorough investigation into the unions’ concerns,” she added.

Tai has requested consultations with the Chinese government as part of the investigation.

A public hearing will be held on May 29 to discuss the matter.

The USW thanked the president for his worker-centered trade policy and for “taking this threat seriously and pursuing a full invesigation.”

“A robust commercial shipbuilding industry is necessary for meeting our national defense and economic security needs, but unfortunately, our domestic capacity has withered as a result of China’s non-market policies,” USW International President David McCall commented in a statement.

Biden calls for higher tariffs, addresses USW

President Biden called on the USTR “to consider tripling the existing 301 tariff rate on Chinese steel and aluminum.” The average tariff on those products is less than 7.5% at present, according to the White House.

The president addressed union workers at the USW headquarters in Pittsburgh on Wednesday, touting the 301 investigation and other efforts his administration has been taking to support the domestic steel industry, including:

  • AD/CVDs: The Department of Commerce has imposed more than 30 antidumping and countervailing duties under the Biden administration.
  • Investments in green steel: ~$1.5 billion in investments in six clean iron and steel projects as part of the infrastructure law and IRA.
  • Mexico: Working with Mexico to prevent China’s evasion of steel and aluminum tariffs.

The president also reiterated his opposition to Nippon Steel’s pending purchase of U.S. Steel, promising to keep the Pittsburgh-based steelmaker “totally American.”

“U.S. Steel has been an iconic American company for more than a century, and it should remain a totally American company – American-owned, American-operated by American union steelworkers, the best in the world. And that’s going to happen. I promise you,” he stated during his speech.

Domestic industry applauds announcements

Major trade associations representing the domestic steel industry welcomed the actions of the administration.

Philip K. Bell, president of the Steel Manufacturers Association (SMA), commended the president’s call for higher tariffs on imports of Chinese metal “amid a sharp rise in Chinese steel flooding the global market.”

Also important to note, said Bell, is “China’s excessive production of high-emissions steel undercuts global efforts to decarbonize the economy.”

Kevin Dempsey, president of the American Iron and Steel Institute (AISI), said, “AISI is very concerned about the recent significant increase in Chinese steel exports to world markets.

“Chinese steel exports to third-country markets often are further processed into other steel or downstream manufactured products that are then exported to the US market,” Dempsey explained.

“The Chinese government is also expanding its unfair trade practices beyond its borders by subsidizing its steel producers in building additional export-oriented steelmaking capacity outside of China — particularly in Southeast Asia through the Belt and Road Initiative,” he added.

“AISI very much appreciates the Biden administration’s continuing efforts to push back on Chinese and other foreign unfair trade practices that hurt American steel producers and their workers,” Dempsey said.

Bell added that Congress should pass the Leveling the Playing Field 2.0 act, as it “would support these administration goals and strengthen America’s ability to fight China’s market-distorting trade practices.”

The USW’s McCall said that, “By combining a firm stance on unfair trade with the work the administration has done on infrastructure, clean technology, microchips and more, President Biden is ensuring US global competitiveness and widespread prosperity well into the future.”

Laura Miller

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