International trade

Biden protects US steel industry

The Biden administration has taken strong measures to protect the US steel, shipbuilding and manufacturing industries threatened by cheap imports of steel and aluminium from China.

Reporting on the move, South African-based XA Global Trade Advisers said the US government would treble the tariffs imposed on Chinese steel and aluminium imports. China was getting around existing US tariffs by diverting “underpriced” exports through Mexico.

“The White House released a comprehensive fact sheet outlining the Biden-Harris Administration’s bold initiatives to protect and revitalise the American steel and shipbuilding sectors in the face of unfair practices from China,” XA said.

Biden’s government saw steel as vital to the economy and national security. American-made steel was fundamental to infrastructure, transportation, and clean energy initiatives. 

The US government was also spearheading significant investments in American manufacturing. These were driving private-sector investments, creating jobs, and boosting manufacturing capacity.

China’s unfair trade practices, including flooding the market with underpriced steel and aluminium, threaten American industries, the US government said. The US was imposing anti-dumping and countervailing duties on steel-related imports to ensure fair competition.

The US was also collaborating with Mexico to prevent the influx of Chinese steel and aluminium through Mexican imports into the United States. In addition, the US is launching an investigation into China’s unfair trade practices in the shipbuilding, maritime, and logistics sectors. 

XA believed all of this set a bad example on how to handle trade disputes.

“It’s not disputed that China behaves poorly in its export markets, but America’s reaction will do nothing to resolve the problem and a lot to exacerbate it. 

“The WTO is there to deal with exactly these sorts of problems, but instead of using the WTO, the US has done its level best to wreck it. The result are bilateral trade wars, which cannot be won and which can persist for a very long time.”

XA said the US was proposing more subsidies to counter Chinese subsidies.

“The winners of subsidy wars are the last to run out of money. For small economies like South Africa, this does not bode well at all,” it stated.