U.S. President Joe Biden announced a number of trade measures against China in a speech to steelworkers in Pittsburgh, known as the "steel capital," including raising tariffs on steel and aluminum imports to China, and launching an investigation into China's trade practices in shipbuilding, maritime and logistics, according to the Observer. Biden argues that because Chinese steel companies produce far more than they need at home, China ends up dumping excess steel into the global market at "unfairly low prices." The Chinese government provides "high subsidies" to its own steel companies, resulting in prices well below market conditions, putting the US steel industry on an unfair competitive footing.
Biden asked the Office of the U.S. Trade Representative to consider tripling the existing tariff rates on Chinese steel and aluminum products to 25 percent. According to Section 301 of the U.S. Trade Act, the average tariff on steel and aluminum products is 7.5%. At the same time, the United States will work with Mexico to prevent China from exporting steel and aluminum products to the United States through Mexico to avoid tariffs. Biden said the U.S. government has sent representatives to Mexico to consult with the Mexican president, and the U.S. and Mexico will work together to resolve the issue.
At present, the Office of the United States Trade Representative has announced the launch of a Section 301 investigation against China, covering the maritime, logistics and shipbuilding industries, on the grounds that China's trade practices, policies, and practices in these areas are unfair. Biden said the U.S. will take further necessary steps if the investigation reveals unfair trade practices in China.
The U.S. government believes that raising tariffs on China will ensure fair competition with China and is necessary to protect its own trade. However, looking at the tariff policy adopted by the US Government against China in recent years, the result is counterproductive, and increasing tariffs is not only not conducive to alleviating the economic predicament of the United States, but will stimulate the rise of US prices and aggravate inflation. In addition, increased tariffs on steel and aluminum in the United States will lead to higher prices, which may increase the cost of steel and aluminum-related goods, or affect other downstream industries, affecting American jobs and livelihoods.
It is understood that the United States will hold a presidential election this year, and Biden's shift to protectionist policies on the eve of the election is exactly the same as that of former US President Trump. In February, Mr. Trump threatened not to fight a trade war with China if elected, but would impose tariffs of more than 60 percent on products from China. Tariffs are an important issue for Trump to win support from the American electorate, and during the Biden administration, economic issues have been unresolved, becoming an important factor in his political fortunes. Therefore, Biden followed Trump's example in making a big fuss about tariffs, which cannot be ruled out as an attempt to win votes.
Regarding the new trade protection measures in the United States, the White House said that in order to protect the American manufacturing industry from China's unfair trade competition, and safeguard the interests of workers in the United States steel and other industries. Biden said that the United States does not want confrontation with China, but seeks fair competition. Biden also believes that his new decision to raise a series of import taxes will not lead to a deterioration in relations with China's top leadership.
It should be pointed out that regarding the U.S. economic and trade restrictions against China, at the fourth meeting of the China-US Economic Working Group, Chinese Vice Minister of Finance Liao Min expressed concern to the U.S. side in Washington and made further responses on the issue of production capacity. At the meeting, the two sides conducted in-depth, pragmatic and constructive communication on topics such as the global and Sino-US macroeconomic situation, balanced growth, and next communication arrangements around the implementation of the important consensus of the leaders, and the two sides agreed to continue to maintain communication and exchanges. After the meeting, U.S. Treasury Secretary Janet Yellen met with the Chinese delegation.
On economic and trade issues, cooperation between the world's two largest economies is conducive to the high-quality development of the global economy. It is hoped that the US side can work with China to consolidate China-US trade relations in a mutually beneficial and win-win manner.