Pennsylvania, Joe Biden's home state, is seen as decisive in the presidential elections on November 5. It is the State with the most weight among those that are up in the air in his search for re-election. It is an industrial region, part of what in the United States is called the rust belt. And in that State, protectionism is on the rise. The president has launched a campaign this week in Pennsylvania and has reserved the star announcement for this afternoon: tripling tariffs on Chinese steel and aluminum. The measure will provoke the foreseeable rejection of Beijing.
Biden will make the announcement at an event with metal workers in Pittsburgh. The president recently showed his opposition to the purchase of the century-old US Steel, based in that industrial city, by the Japanese company Nippon Steel, in another gesture of economic nationalism, in this case against an ally, such as Japan. “It is important to maintain strong American steel companies powered by American workers. “I told our steelworkers I had their backs, and I meant it,” Biden tweeted. “US Steel has been an iconic American company for more than a century, and it is vital that it remains domestically owned and operated,” he added.
In 2016, Donald Trump took the confrontation with China as a rallying point for the victims of globalization and prevailed over Hillary Clinton in states like Pennsylvania, Michigan and Wisconsin where the industrial worker vote is very relevant. Biden reconquered those states for the Democrats and has maintained an economic policy of support for industrial union workers. Furthermore, beyond Trump's tariffs, Biden has undertaken a policy of incentives for investments in electric batteries and microprocessors that has led to a recovery in industrial employment.
Biden presents himself as the most pro-union president in history and is taking advantage of these days in which he mixes official events with other campaign events in Pennsylvania to show himself as genuinely concerned about the interests of workers, in contrast to a billionaire Trump. He marked the contrast in his native Scranton. “Scranton is a place that gets into your heart and never leaves,” he said. “I learned a lot in Scranton. I learned that money does not determine your worth,” he continued. “People like Donald Trump learned a different lesson,” he attacked. “When I look at the economy, I don't see it through the eyes of Mar-a-Lago [la mansión de Trump en Florida]”I see it through the eyes of Scranton,” he said, contrasting the values of both places.
25% tariffs
For both steel and aluminum, the current tariff, imposed during Trump's presidency, is 7.5% and Biden proposes raising them to 25%. The proposal is sent to his commercial representative, Katherine Tai, who is the one who must apply it. Biden will also announce investigations into Chinese competitive practices in the shipyard sector and other related industries.
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In addition to more than tripling tariffs on direct imports from China, the United States government says it is working with Mexico to ensure that Chinese companies cannot avoid tariffs by sending steel there for subsequent export to the United States. In 2023, Mexico became the first origin of US imports, but many of the products initially came from the Asian country. The Administration also promised to carry out investigations antidumping against other countries and importers that try to saturate the markets with Chinese steel.
“The president understands that we must invest in American manufacturing. But we also have to protect those investments and those workers from unfair exports associated with China's excess industrial capacity,” declared Lael Brainard, national economic advisor to the White House, in a call with the media collected by the AP agency.
“China's policy-driven overcapacity poses a serious risk to the future of the U.S. steel and aluminum industry,” Brainard added. Referring to China's economic recession, he added that Beijing “cannot export its way to recovery.” The Administration asserts that China is distorting markets and eroding competition by unfairly flooding the market with below-market-cost steel. “China is simply too big to play by its own rules,” the economic adviser said.
Treasury Secretary Janet Yellen criticized the International Monetary Fund (IMF) this Tuesday for not focusing on what he considers unfair Chinese practices. “When markets weaken, prices fall and it is our companies that go bankrupt, and those of our allied countries. “Chinese companies continue to receive aid to sustain themselves.”
Yellen already warned last week during her visit to China about the US government's concerns. “I have expressed to senior Chinese officials my concern about the existence of characteristics of the Chinese economy that have increasingly negative repercussions on the United States and the rest of the world,” he said in Beijing.
“When the global market is flooded by artificially cheap Chinese products, the viability of American and other foreign companies is called into question,” Yellen added, referring to new industries such as electric vehicles, lithium-ion batteries and solar energy, but without forgetting the disputes over steel: “We have seen this story before. More than a decade ago, massive support from the PRC government led to below-cost Chinese steel flooding the global market and decimating industries around the world and in the United States. I have made it clear that President Biden and I will no longer accept that reality. “I know these grave fears are shared by our allies and partners, from advanced economies to emerging markets.”
China produces about half of the world's steel and its capacity far exceeds the needs of its domestic market. It sells steel on the world market for less than half of what steel produced in the United States costs, according to Washington.
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