Biden calls for a tripling of tariffs on Chinese steel as he makes economic pitch in Pittsburgh

By Betsy Klein and Michael Williams, CNN

(CNN) — President Joe Biden called on his administration to ratchet up pressure on the Chinese steel industry as he brings his economic competition pitch to Pittsburgh, the heart of the American steel industry, on Wednesday, part of a three-day campaign trail swing through battleground Pennsylvania.

“The bottom line is I want fair competition with China, not conflict,” Biden said in Pittsburgh on Wednesday. “And we’re in a stronger position to win the economic competition in the 21st century against China, or anywhere else, because we’re investing in America and American workers again.”

The domestic steel industry remains critical to building everything from cars to appliances, to roads and bridges, and Biden has made investment in American manufacturing a key plank of his economic policy – even as voters continue to give him low marks on his handling of the economy.

The president made an economic pitch around tax policy and visited with union workers in his hometown of Scranton on Tuesday, and he will travel to Philadelphia for campaign events on Thursday, seeking to set up a stark split screen as former President Donald Trump spends much of his week in a New York City courtroom for a criminal trial.

Speaking from the United Steelworkers headquarters, Biden called on United States Trade Representative Katherine Tai to “consider tripling” the existing 7.5% tariff rate on Chinese steel and aluminum through a review of the Section 301 tariff rate, pending the conclusion of a four-year review.

Officials expect the ongoing review to be completed “soon,” and Tai could take action to “(enhance) the effectiveness” of the tariffs based on its findings, a senior official said.

China’s Commerce Ministry responded on Wednesday saying it “firmly opposes” the continuing review. America’s shipbuilding industry lost its competitive advantage many years ago due to over-protection, it claimed, citing multiple US research reports.

The US effort is “full of false accusations, misinterpreting normal trade and investment activities as harming US national security and corporate interests, and blaming China for its own industrial problems. This lacks factual basis and goes against economic common sense,” it said in a statement.

National Economic Council director Lael Brainard described Biden’s call as “strategic, balanced, and targeted,” saying it would safeguard the US from China’s efforts to undercut domestic steel manufacturing.

“The president understands we must invest in American manufacturing, but we also have to protect those investments and those workers from unfair exports associated with China’s industrial overcapacity,” which, she said, “poses a serious risk to the future of the American steel and aluminum industry.”

Brainard said the approach was developed “in close partnership with industry stakeholders and unions.”

Biden also highlighted the Department of Commerce’s efforts to crack down on China’s attempts to “flood the market with cheap products” through anti-dumping and countervailing duties, among other actions.

“They’re not competing – they’re cheating,” Biden said of China. “They’re cheating, and we’re seeing the damage here in America.

The trip comes after Biden last month publicly opposed a controversial $14 billion deal for Japan’s Nippon Steel to purchase US Steel. US Steel shareholders approved the deal last week, but it still needs approval from the Justice Department and the Committee on Foreign Investment in the United States.

In March, Biden said it is “vital” for US Steel “to remain an American steel company that is domestically owned and operated.” He reiterated those sentiments on Wednesday, telling the crowd to cheers that 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 said.

Officials downplayed concerns that the potential tariffs could lead to additional inflation.

“If taken, these actions will not increase inflation, but they will protect American jobs and (the) steel industry,” a senior official said, suggesting there will be “no impact on inflation at all.”

Residual inflation “is not coming from goods,” the official added, and “these actions will not change that.”

“Our trade actions are actually strategic and balanced. President Biden will not impose ineffective, across-the-board tariffs that would increase costs and harm hundreds of thousands of jobs,” the official said. “In fact, the imports of steel from China accounted for about 0.6% of total US steel demand, so it’s quite small, and we see no inflationary pass through. But it is important for us to get ahead of China’s new export surge and their continued pressure on prices that makes it hard for American steel companies to compete.”

Still, US consumers will ultimately pay any tariffs on imports, not the exporting country – which can lead to increased prices.

The United Steelworkers, a key union representing workers in the steel industry, endorsed Biden’s reelection campaign last month.

Biden’s Pennsylvania push comes as he’s also seeking to move the needle with voters who continue to hold sour views about the president’s handling of the economy. Recent polling has also shown a close contest between Biden and Trump fewer than seven months from Election Day.

Trump made tariffs against China a central feature of his global economic strategy, and Biden has largely maintained them, despite external criticism. By calling for a tariff hike he says would protect American workers, Biden also appears to be attempting to insulate himself from Trump’s criticism that he’s weak on China.

A new tariff hike could threaten Biden’s attempts at repairing what has been a tense relationship between the world’s two largest economies. China has denied accusations of overcapacity and claims the US is seeking to stifle competition through protectionist trade policies. Biden has sought in recent months to stabilize a fraught relationship with China, including in direct conversations with President Xi Jinping. The efforts appeared to bear fruit this week when Defense Secretary Lloyd Austin spoke with his counterpart for the first time in a year.

CORRECTION: This story has been updated to correct the location of where Biden will deliver his remarks on Wednesday.

CNN’s Chris Isidore, Arlette Saenz, Shawn Deng and Kevin Liptak contributed to this report.

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