President Biden recently announced a plan to triple current tariff rates on imports of Chinese steel and aluminum under Section 301 of The Trade Act of 1974, calling on United States Trade Representative (USTR), Katherine Tai, to investigate China's unfair shipbuilding industry practices.
Biden stated, "Look, right now, my U.S. Trade Representative is investigating trade practices by the Chinese government regarding steel and aluminum. If that investigation confirms these anti-competitive trade practices, then I'm calling on her to consider tripling the tariff rates for both steel imports and aluminum imports from China."
These actions are intended to protect U.S. workers from Chinese industries the administration has said are benefiting from unfair subsidies that boost China's economy. "It's important that these new tariffs – if enacted – provide a more level playing field against China's unfair trade practices on steel and aluminum," said a senior administration official.
China's overcapacity and non-market investments in the steel and aluminum industries mean U.S. products are competing with artificially low-priced alternatives. In recent years, the Department of Commerce has imposed over 30 antidumping and countervailing duties on steel related products and has conducted nearly 27 investigations into China's unfair import practices.
In calling on the USTR to take these actions against China, the administration is aware of the potential for tariff evasion tactics, particularly the use of redirecting shipments through Mexico to gain access to the U.S. market. Members of the Biden administration recently traveled to Mexico to address this issue.
Before initiating a new investigation on China's shipbuilding industry, the USTR will need to first submit the findings of its review of tariffs imposed under former President Trump's administration.
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