May 18, 2024

Amid concerns about the U.S. steel industry, including a proposed sale of U.S. Steel to Nippon Steel, the Biden administration wants to triple tariffs on Chinese steel.

Jared Bernstein, Chairman of President Biden’s Council of Economic Advisers (CEA), joined CNBC Television to discuss Biden’s plans. Speaking of President Biden, Bernstein said:

“He’s recognized the importance of investing in American manufacturing, and he’s followed through on that as no modern president has before him,” Bernstein said. “And American steel which, by the way, is among the cleanest, lowest-emission steel produced in the world, is key to our manufacturing agenda.

“It’s also the case that we have to protect those investments and the workers who make that steel, from unfair exports associated with China’s industrial over-capacity. That’s what’s behind what you just described, directing our trade representative to consider tripling the steel tariffs, on China specifically.”

When asked if increased tariffs could have an inflationary effect, Bernstein emphasized that this is a “targeted intervention” that should have little impact.

“In many ways, this is a targeted intervention that shouldn’t have much impact at all on inflation,” Bernstein added. “It’s the case that the amount of Chinese steel we import is actually quite small at this point. But given their investment in excess capacity, and particularly the high carbon emission inherent in their steel, this intervention is important in a preventive sense.”

Bernstein then went on warn of the danger of ignoring a country that exports excess production into the United States, essentially “hollowing out” U.S. manufacturing capability.

President Biden has voiced his opposition to U.S. Steel’s sale to Nippon despite the deal being approved by shareholders. Bernstein confirmed that Biden believes domestic steel manufacturing is the backbone of ‘the American economy, the bedrock of U.S. national security.’