...now MATERIALS/RESOURCES have entered the geopolitical space (in addition to semiconductors, EV)
...we didn't have to wait for Trump 2.0, Biden resort to do the 'Trump formula' to win votes.
...'hey listen up, you don't mind me putting a large increase in tariffs on your steel, because I need to win some key votes in Penn?'
...people who live in glass houses should not throw stones.
...you can only imagine the markets would be collateral damage. Biden triples tariffs on Chinese steel and aluminium, denies trade war Matthew CranstonUnited States correspondent
Updated Apr 18, 2024 – 6.49am,first published at 6.44am
Washington | US President Joe Biden dismissed concerns of a new trade war with China after declaring a tripling of tariffs on Chinese steel and aluminium imports, a move which is unlikely to have any big impact on demand for Australia’s iron ore and coal.
US Trade Ambassador Katherine Tai and some US Senators told The Australian Financial Review that the US would monitor closely any impacts on Australian exports from the latest policy announcement directed toward China.
“No trade war,” Mr Biden said on Wednesday (Thursday AEST) after announcing tariffs on certain Chinese steel and aluminium products would be tripled, to 25 per cent from of 7.5 per cent.
The populist, protectionist move which adds to increases on similar tariffs under the Trump administration, is designed to woo steel industry workers in battleground states in this year’s election. Last month, Mr Biden said he wouldn’t support Nippon Steel’s proposed $US14.1 billion ($22 billion) acquisition of US Steel.
“President Biden knows that steel is the backbone of the American economy,” the White House said in a statement. “American workers in the steel and aluminum industries face a significant challenge from Chinese exports of steel and aluminum.”
The action, however, is largely symbolic, given US imports of Chinese steel and aluminium totalled just $US1.7 billion in 2023. Chinese steel accounts for only 1 per cent of America’s domestic supply, and aluminium for about 3.6 per cent of total imports.
Mining giant Rio Tinto said this week that China’s domestic steel demand was at levels similar to last year, but that “steel exports rose 30 per cent year-on-year during the first two months [January and February] and are likely to remain historically elevated, in turn, supporting iron ore demand”.
The Biden administration says China’s overproduction is hurting America’s steel industry.
“China’s overcapacity and non-market investments in the steel and aluminum industries mean high-quality US products have to compete with artificially low-priced alternatives produced with higher carbon emissions,” the White House said.
China’s Foreign Ministry hit back, saying that the “notion that China’s overcapacity harms the global market is a complete fallacy”.
“Those who spread that narrative to justify protectionism have nothing to gain from it,” said spokesman Lin Jian.
Australia is exempt from US tariffs on steel and aluminium imports, but there are concerns a reduction in Chinese steel and aluminium exports could hurt demand for Australia’s iron ore, aluminium and coal used in the production process.
US Trade Representative Katherine Tai said she was always thinking about Australia when taking these actions.
“We have our own trade relationship with Australia. And trust me, in the interagency conversations, we are thinking up to the 10th order on things,” she told the Financial Review on the sidelines of a Congressional hearing into trade policy on Wednesday (Thursday AEDT).
Robert Dohner, who as a deputy assistant Treasury secretary helped establish the Strategic Economic Dialogue with China under the Bush and Obama administrations, said there could be some longer-term effect on Australian commodities.
“It won’t have much effect on steel trade, but it may encourage other countries to raise their tariffs on imports of steel from China. If so, that could have a larger effect,” Mr Dohner said.
Concerns about how this action on China might affect demand for Australian product, Democrat Senator Sherrod Brown told the Financial Review after the trade hearing that “I don’t share your concerns.”
Republican Senator Steve Daines said he thought it was “important that the impact is clearly understood.”
“We love Australia’s it’s a great country and Australia and the United States share so many of the same values. So anything that would harm Australia I’d be concerned about as it relates to tariffs,” Senator Daines said.
“We have to keep working together with Australia being a key ally of the United States, and to keep the dialogue and discussion going.”
Republican Senator Bill Cassidy said Australia and US economic interests were “very closely aligned” and that instead of taking the action the Biden administration had with the latest steel tariffs, known as section 301, he would instead rather see a carbon border adjustment scheme.
“China is effectively subsidising their industry by not enforcing environmental regulations. Now, there may be a little bit of collateral damage to a country like Australia. But I think, frankly, it’s in all of our interest that China compete on a fair on a fair basis,” Senator Cassidy said.
“[Australia] sells a lot of natural gas, so a carbon border adjustment scheme is going to expand the market for natural gas because China’s cheapest way, the fastest way for them to clean up their air pollution is to substitute natural gas for coal. So I think that Australia would adapt very nicely in that regimen.”
