GT Voice: US tariffs futile in attempt to contain China's steel industry
Published: Apr 18, 2024 11:53 PM
Illustration: Chen Xia/Global Times

Illustration: Chen Xia/Global Times

US President Joe Biden on Wednesday called for a steep hike to tariffs on steel and aluminum products from China as he delivered remarks at the United Steelworkers' headquarters in the "Steel City" of Pittsburgh, Pennsylvania, Reuters reported.

Biden aides said that the president was proposing raising to 25 percent the tariffs imposed by his predecessor Donald Trump on certain Chinese steel and aluminum products, which currently face up to a 7.5 percent tariff.

At a time when the US steel industry is focused on opposing Japanese company Nippon Steel's attempt to acquire US Steel, Biden's proposal to ratchet up pressure on the Chinese steel industry appears to be disconnected from the concerns of union steelworkers. 

On the one hand, it is highly questionable what role the strategy of targeting Chinese steel will play in revitalizing the US steel industry. On the other hand, US tariffs may weigh on Chinese steel imports, but they will be futile in containing China's steel industry.

Indeed, US steel imports from China have already decreased significantly under the weight of tariffs. The US imported roughly $6.1 billion in steel products in the 12 months ended in February 2023, but just 3 percent of those imports came from China, according to ABC News, citing Census Bureau figures.

Also, the American Iron and Steel Institute said that in 2023, 598,000 tons of steel were imported from China, down 8.2 percent from 2022 and accounting for only 2.1 percent of US steel imports. By comparison, the US imported 6.9 million tons of steel from Canada and 4.2 million tons from Mexico, the two biggest sources of foreign steel, according to media reports. 

Yet, despite the trade barriers, the remaining steel imports from China still represent some indispensable US demand for Chinese steel products. This is not just because of the price advantage of Chinese steel products. More importantly, China's steel industry has demonstrated a strong competitiveness in terms of both technology and quality. 

With the rapid development of Chinese manufacturing and the continuous improvement of the industrialization level, China's steel industry has made significant progress in technological innovation and product quality management, enabling its products to meet the increasingly stringent demands of the international market.

In particular, the competitiveness of China's steel products has been in full display in the global infrastructure construction sector in recent years. For instance, when New York's Metropolitan Transportation Authority (MTA) was found to have ordered 150,000 tons of imported Chinese steel for renovations to the city's landmark Verrazano-Narrows Bridge in 2013, it was quickly engulfed in criticism. The MTA then defended its decision, stating that there's not a steel plant in America that can produce the type of high-tech steel plate it wants - a lighter and more resilient orthotropic steel deck. 

An MTA spokesperson even told the media that the agency went to "extraordinary lengths" to recruit a US steel manufacturer for the bridge job, but that higher prices and uncertain delivery schedules made an American purchase impossible.

If anything, the example is sufficient to indicate the strength of Chinese steel products in terms of quality and performance, which can meet the needs of any high-demand infrastructure project. China's achievement in building the world's highest bridge is also a strong testimony to the competitiveness of its steel industry. Of the world's 100 highest bridges, 90 are in China, which all require steel products with the highest quality and the best performance in construction, according to media reports.

There is no way the US can rely on protectionism to make US steel plants produce the best-quality steel products like China does. On the contrary, it can only make the American steel industry lag China's. Biden may have won some votes, but he does not have the power to bolster the entire American steel industry's competition against its Chinese peers.