A new episode in the trade war between the United States and China was launched on Thursday. US President Joe Biden will shortly announce a sharp increase in tariffs on Chinese metal products. The announcement is part of a package of measures designed to benefit steelmakers in the pivotal state of Pennsylvania at Beijing’s expense.
Against a backdrop of pre-campaigning for the presidential elections scheduled for November this year, US President Joe Biden visits Pittsburgh this afternoon, where he will be cheered by the United Steelworkers union.
The President will ask the US Trade Representative to triple existing tariffs on Chinese steel and aluminum to 25%. A measure that extends the 7.5% levies under a policy inherited from the Trump era.
These measures will be unveiled during Biden’s visit. It’s a safe bet that China will retaliate to these measures, as Beijing has done in the past when Washington has adopted restrictive policies. Tensions between the two economic powers are running high, particularly following US decisions to restrict access to cutting-edge semiconductor technologies.
The Biden administration is also pressuring Mexico to prevent China from circumventing tariffs on steel and aluminum.
Imminent sale and short circuit in sight
This news comes against the backdrop of US Steel ‘s planned sale to Japan’s Nippon Steel. This $15 billion merger is opposed by the US President, in order to protect the American steel industry.
At the same time, a $1.5 billion investment is planned to promote “clean” steel made in the USA. It will be devoted to six projects supporting communities in Ohio, the South, the Midwest and Pennsylvania.
A key state
Pennsylvania is one of a half-dozen key states likely to decide the November electoral rematch between Biden and Trump. The economy is one of voters’ main concerns.
Both candidates have courted unions and workers, who make up an important voting bloc in Pennsylvania and Michigan, another key state.
Trump, who withdrew in 2017 from the future Trans-Pacific Partnership trade deal, had proposed 10% tariffs on all imports if he returned to office.