Biden administration confirms China 25% steel tariff
The Biden administration confirms it will increase the tariff rate on certain China-origin steel and aluminium products under Section 301 from 0-7.5% to 25% in 2024. This follows an in-depth review by the United States Trade Representative.
The move is part of tariff action against multiple Chinese products, designed to encourage China to “eliminate its unfair trade practices regarding technology transfer, intellectual property, and innovation”, a White House statement says.
Besides steel and aluminium, the tariff rate on Chinese semiconductors will increase to 50% by 2025, on electric vehicles under Section 301 to 100% in 2024, on lithium-ion EV batteries to 25% in 2024, and on solar cells (whether or not assembled into modules) to 50% from 2024. Ship-to-shore cranes and medical products are also impacted.
“China’s forced technology transfers and intellectual property theft have contributed to its control of 70, 80, and even 90% of global production for the critical inputs necessary for our technologies, infrastructure, energy, and health care – creating unacceptable risks to America’s supply chains and economic security,” notes the White House statement seen by Kallanish.
“Furthermore, these same non-market policies and practices contribute to China’s growing overcapacity and export surges that threaten to significantly harm American workers, businesses, and communities,” it adds.
“We will continue to work with our partners around the world to strengthen cooperation to address shared concerns about China’s unfair practices – rather than undermining our alliances or applying indiscriminate 10% tariffs that raise prices on all imports from all countries, regardless whether they are engaged in unfair trade,” the note concludes.
Some of the impetus to review trade agreements with China came from Chinese customs data that showed a 30.7% year-on-year increase in steel exports during the first quarter.
The review has received support from US steel industry leaders. Last month, American Iron and Steel Institute president Kevin Dempsey said that while direct Chinese steel shipments have not grown to the US to this extent, Chinese steel exports to third country markets are often further processed into downstream manufactured products that are supplied to the US.
Biden administration unveils its final Buy America guidance
US President Joe Biden’s administration has published its final “Build America Buy America” guidance in order to help federal and state agencies fully take advantage of funding being granted through the Bipartisan Infrastructure Law.
Kallanish understands that the Office of Management and Budget (OMB) has issued a revision to Title II of the code of federal regulations (2 CFR). This revision includes the addition of a new amendment to the code, section 184, intending to define key terms that pertain to iron/steel products.
In 2 CFR section 184, OMB explains that materials incorporated in infrastructure projects must meet the Buy America preferences for only a single category in which the materials are classified. This means that, in the case of iron and steel products, there is no restriction on the place of manufacturing for components or subcomponents that do not consist of iron or steel.
“The final guidance will support implementation of the Bipartisan Infrastructure Law’s (BIL) statutory requirements that manufactured products, construction materials, and iron and steel used in federally funded infrastructure projects are made in America,” explains Livia Shmavonian, the Biden administration’s Made in America director.
Zach Johnson USA