The Biden administration has announced a package of policy measures to protect the US steel, aluminum, and shipbuilding industries from what they allege are unfair trade practices by China and calling the industries critical to economic and national security.1 The most significant new actions in the announcement are that the Office of the United States Trade Representative ("USTR") will (1) raise the current Section 301 tariffs on Chinese steel and aluminum; (2) initiate a new Section 301 investigation targeting the Chinese shipbuilding, maritime, and logistics sectors; and (3) intensify efforts to combat alleged transshipment of Chinese steel through Mexico. President Biden unveiled the actions during meetings with US labor unions in Pittsburgh, Pennsylvania on April 17, 2024.
Increasing Section 301 tariffs on Chinese steel and aluminum
USTR will implement President Biden's call for higher tariffs on China by tripling the current Section 301 tariffs applied to Chinese steel and aluminum products from the current average of 7.5% to an average of 22.5%. USTR is now conducting a mandatory four-year review of the Section 301 tariff action.2 The Biden administration will likely use the completion of the four-year review to implement the tariff increases. Imports of Chinese steel and aluminum are also subject to Section 232 tariffs of 25% and 10%, respectively. Combining the Section 232 tariffs with the increased Section 301 tariffs will yield average tariff rates of around 47.5% for steel products and of around 32.5% for aluminum products. Some of these products are also subject to antidumping duties ("ADD") and countervailing duties ("CVD"), which would further increase the tariff level.
The four-year review, which USTR announced in May 2022, is in its second phase and appears near completion. USTR collected public comments for phase two between November 2022 and January 2023, receiving 1,497 submissions from the public.3 Since the comment docket closed, there have been no further updates from USTR on the review, other than occasional references to how it is still ongoing. Though Section 301 requires USTR to initiate a review of Section 301 actions every four years to keep the action active, the law does not contain a comprehensive timeline for completing the reviews. In testimony before the House Ways and Means Committee on April 16, 2024, Ambassador Katherine Tai said USTR would complete the review soon in response to complaints about the slow pace, though she did not specify a timeline.4 The White House, relying on the review to implement these higher tariffs, also suggests the completion of the review is imminent.