Biden reaffirms US Steel acquisition opposition, hints at boost in Chinese metal tariffs

At a campaign appearance in Pittsburgh, President Joe Biden reaffirmed his earlier remarks that the United States Steel Corp. should remain American owned and American operated, also referring to steel and aluminum trade issues with China.

The acquisition of U.S. Steel Corp. by the Nippon Steel Corp. (NSC) of Japan has been approved by U.S. Steel shareholders. Nonetheless, opposition to the deal is one of the few issues on which Biden and his opponent Donald Trump agree.

In February, speaking to an audience of Teamsters union workers, Trump said of the planned acquisition, “I would block it instantaneously.”

In his comments this week, Biden said, “U.S. Steel has been an iconic American company for more than a century, and 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.”

The president was light on context as to why NSC was an unworthy buyer of U.S. Steel, although other elected officials have referred to national security concerns. NSC is based in Japan, an ally of the U.S. since 1946, and the company has claimed it will retain Pittsburgh as its U.S. regional headquarters.

Biden also referred to anticipated actions his administration may take regarding China’s role in the world’s metals markets.

“For too long, the Chinese government has poured state money into Chinese steel companies, pushing them to make so much steel—as much as possible—subsidized by the Chinese government,” he said.

“Because Chinese steel companies produce a lot more steel than China needs, it ends up dumping the extra steel into the global markets at unfairly low prices. And the prices are unfairly low because Chinese steel companies don’t need to worry about making a profit, because the Chinese government is subsidizing them so heavily.

“They’re not competing; they’re cheating ... and we’ve seen the damage here in America.”

The president then referred to more than 14,000 steelworkers (and ironworkers, in a clarification added by White House staff) in Pennsylvania and Ohio who lost their jobs. Those job losses, Biden said, coincided with the early 2000s, when Chinese steel began flooding the market.

As to remedies, the president referred to an office of the U.S. Trade Representative investigation of trade practices by the Chinese government regarding steel and aluminum. “If that investigation confirms these anti-competitive trade practices, then I’m calling on [USTR leader Katherine Tai] to consider tripling the tariff rates for both steel imports and aluminum imports from China," he said.

Currently, steel from China is subject to an up to 25 percent tariff in the U.S. while aluminum is greeted with a duty rate of up to 10 percent. Those tariffs were introduced during the Trump administration and were applied to all nations. The tariffs applying to China largely have been retained by Biden.

Biden also referred to the “triangular” trade of Chinese metal via Mexico to the U.S. and said, “Just yesterday, I had a delegation down in Mexico meeting with AMLO [Andrés Manuel López Obrador], the Mexican president, to address this issue. Mexico and the United States are going to work together to solve it, I promise you.”

Finally, Biden referred to the presence of Chinese steel in the shipbuilding sector.

“My administration is also taking a real hard look at the Chinese government’s industrial practices when it comes to global shipbuilding, which is critical to our economy," he said. "That’s why my administration takes it very seriously that U.S. Steelworkers, along with four other unions, have asked us to investigate whether the Chinese government is using anticompetitive practices to artificially lower prices in the shipbuilding industry.”

For ferrous scrap generators and processors, the use of Chinese steel, made largely with iron ore-fed blast furnaces and basic oxygen furnaces, as a replacement for steel made with scrap-fed electric arc furnaces in the U.S., Turkey, Malaysia, Taiwan or numerous other countries can contribute to suppressing the price of their scrap.