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President Joe Biden is taking a hard stance on trade with China, proposing a significant hike in tariffs on steel and aluminum imports. This move comes amid heightened economic tensions between the two global powers.
What Happened: Biden has put forward a plan to dramatically increase tariffs on steel and aluminum imports from China, CNBC reported on Wednesday.
During an upcoming visit to the United Steelworkers headquarters in Pittsburgh, Pennsylvania, Biden is expected to announce his push for raising the average tariff from 7.5% to counter what his administration perceives as China’s unfair trade practices. This initiative is in line with the administration’s recent warnings about China’s economic strategies.
Treasury Secretary Janet Yellen has voiced concerns about Chinese subsidies contributing to an oversupply of clean energy products. In a CNBC interview, Yellen did not dismiss the possibility of tariffs as a countermeasure if these concerns are not resolved. Despite Chinese officials rejecting these claims and attributing their production capabilities to innovation, the Biden administration is taking a more confrontational approach.
The administration is adopting a tougher stance amid the pressures of election-year politics and a complex international trade landscape. A senior administration official has argued that the proposed tariff hikes are designed to protect American jobs and the steel industry, rather than exacerbating inflation.
Why It Matters: President Biden’s proposal to increase tariffs on Chinese steel and aluminum imports is part of a broader strategy to address trade imbalances and protect national industries. This strategy was recently highlighted when the administration blacklisted a record number of Chinese companies, surpassing the actions taken by previous administrations.
The administration’s aggressive trade posture echoes concerns similar to those raised by Goldman Sachs regarding former President Donald Trump‘s tariff proposals. Goldman Sachs warned that such measures could slow down the U.S. economy and fuel inflation. However, the current administration contends that the new tariffs will bolster domestic industries without contributing to inflationary pressures.
Image via Shutterstock
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