The White House is calling for a large increase in tariffs on Chinese steel and aluminum as part of a push for low-carbon manufacturing.
President Joe Biden is set to make the announcement at the U.S. Steelworkers headquarters in Pittsburgh on Wednesday. The proposed import penalties — which are part of an ongoing U.S. Trade Representative review — aim to boost American steel and aluminum while the Biden administration pours money into decarbonizing the industry.
Last month, the Department of Energy announced $1.5 billion for major “green” steel projects in the U.S., including a near-zero emissions project by the European firm SSAB and another by U.S. producer Cleveland-Cliffs. Another several hundred million dollars of the money announced last month is going to aluminum projects.
China’s “overcapacity poses a serious risk to the future of the American steel and aluminum industry,” White House economic adviser Lael Brainard said Tuesday on a call with reporters previewing the plan. “China’s subsidies and other forms of support lead to exports flooding global markets at artificially low prices undercutting American steel that is cleaner.”
Steel is one of the most carbon-intensive industries, producing roughly eight percent of energy sector emissions annually, according to the International Energy Agency. In a fact sheet, the White House said Chinese exports of steel and aluminum are among the “most emissions-intensive products in the world.”
The Biden administration said it would work with Mexico to prevent “China’s evasion of tariffs on steel and aluminum that is imported from Mexico into the United States.” A senior administration official on the call with Brainard said Chinese steel imports officially “account for about 0.6 percent of total U.S. steel demand,” arguing that the actions will not cause U.S. inflation.
Brainard said the White House is urging the U.S. Trade Representative to impose a roughly 22.5 percent average tariff on Chinese steel and aluminum imports — triple the current level of 7.5 percent.
An administration official declined to comment on why the White House was making the announcement now, considering the ongoing review. That four-year review of China-related Section 301 tariffs, which are used to protect U.S. companies from overproduction abroad, kicked off in 2022. A White House spokesperson also declined to comment on when the USTR, a White House office, will wrap up the review.
Chinese steel and aluminum is also taxed through a separate set of tariffs called Section 232, which aim to improve national security.
Earlier on Tuesday, White House climate adviser John Podesta announced a new task force to promote trade in climate-friendly goods. Podesta focused on aluminum.
“Today, over half the world’s aluminum is made in China, where the average ton of aluminum produces 60 percent more emissions than it does in the U.S.,” he said at Columbia University’s Global Energy Summit. “Globally, aluminum production is substantially dirtier than it needs to be. “It’s what we call a race to the bottom.”
Earlier this month, the U.S. pushed the World Trade Organization to focus more on clean trade. Meanwhile, Biden has said he opposes the purchase of U.S. Steel by Japanese firm Nippon Steel.
This story also appears in Climatewire.
